N9%ca 


THE  LIBRARY  OF  THE 
UNIVERSITY  OF 
NORTH  CAROLINA 


THE  COLLECTION  OF 
NORTH  CAROLINIANA 


N87CO 


I 


a  handbook  on 


COOPERATIVE 

MARKETING 


Published  for  use  of  local  officers  and  em¬ 
ployees  by  the  North  Carolina  Cotton  Growers 
Cooperative  Association  and  the  Tobacco  Grow¬ 
ers  Cooperative  Association,  Raleigh,  N.  C. 


1923 


TABLE  OF  CONTENTS 


Cooperative  Commodity  Marketing . 

Fundamental  Principles . 

The  Cause  and  History  of  Our  Associations 

Description.  Control  and  Functions . 

Some  Questions  and  Answers . 

Contracts  Basis  of  Business . 

Local  Organizations . . 

Publications  . 

Sources  of  Information . 

Southern  Cotton  Cooperative  Associations.... 

Cotton  Statistics . 

Tobacco  Statistics . 

Tobacco  Cooperative  Associations . . 

National  Council  Cooperative  Associations.... 
Extracts  from  Speech  of  Aaron  Sapiro . 


This  handbook  compiled  by  a  joint  committee  c< 
sisting  of  S.  D.  Frissell,  R.  W.  Green,  John  A.  Livii 
stone,  and  C.  C.  Zimmerman. 


1.  COOPERATIVE  COMMODITY  MARKETING 

^What  It  Is 

A  Cooperative  Commodity  Marketing  Associa- 
on  is  an  organization  of  the  growers  of  a  product 
the  pur  pose  of  making  the  business  of  growing 
lat  product  profitable.  Two  methods,  one  or- 
erly  marketing  and  the  other  standardization  or 
ie  improvement  of  the  product,  are  used  to  make 
profits  for  the  growers. 

These  two  methods — orderly  marketing  and 
andardization — are  combined  called  merchandis- 
ig.  Cooperative  Commodity  Marketing  is  or- 
erly  marketing  and  standardization.  Coopera- 
ve  Commodity  Marketing  is  profitable  because  it 
inders  a  better  product  in  a  better  order  than 
iy  previous  system  of  marketing— and  sees  that 
le  grower  receives  the  rewards. 

Orderly  Marketing 

By  orderly  marketing  the  product  is  sold  to  the 
anufacturer  or  ultimate  consumer  as  the  need 
uses,  not  in  a  few  weeks  as  the  grower  prepares 
for  the  market.  Thereby  eventually  the  price 
fixed  by  the  supply  at  point  of  distribution  and 
)t  by  the  supply  at  point  of  production.  Orderly 
arketing  helps  stabilize  the  price  for  the  benefit 
both  grower  and  consumer. 

Standardization  and  Improvement 

Standardization  begins  with  the  selection  of 
iproved  seed  by  the  grower  and  continues  with 


a. 


3 


the  careful  processing  and  packaging  of  the  prod¬ 
uct  after  it  is  gathered.  Careful  grading  of  the 
cotton  and  tobacco  after  it  is  received  by  the 
associations  enables  the  grower  to  receive  a  pre¬ 
mium  for  his  efforts  to  standardize  the  product. 
The  standardization  of  grades  is  an  essential  and 
important  part  of  cooperative  marketing. . 

These  two  processes — orderly  marketing  and 
standardization— which  are  together  called  mer¬ 
chandising,  are  both  vitally  necessary  to  success 
The  first  year  the  gain  from  cooperative  com 
modity  marketing  comes  most  largely  from  orderly 
marketing.  After  that,  and  of  increasing  im 
portance,  come  the  gains  from  standardization. 

Business  Methods  and  Service 

Cooperative  commodity  marketing  is  but  tin 
application  of  the  known  successful  business  prin 
ciples  to  the  grower’s  market.  It  is  better  thai 
the  former  system  because  it  furnishes  a  superio 
product  in  a  more  orderly  way  and  returns  th 
profits  gained  thereby  to  the  farmer’s  pocket. 


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4 


THE  FUNDAMENTAL  PRINCIPLES  ON  WHICH 
WE  HAVE  ORGANIZED 


Under  the  expert  guidance  of  Aaron.  Sapiro  we 
r\e  oiganized  our  Associations  on  the  following 
isic  principles: 

1.  We  have  organized  by  commodity. 

2.  We  have  only  growers  for  members. 

3.  We  are  Cooperative — one  man,  one  vote, 
ur  associations  are  ours  and  we  control  them. 

4.  We  have  a  five-year  legal  binding  contract. 

5.  We  pool  our  products  by  type  and  grade,  and 
tch  member  gets  the  same  price  for  the  same 
lantity  and  quality. 

6.  We  are  big  enough  to  hire  experts  to  run  our 
isiness  and  serve  us. 


3.  THE  CAUSE  AND  HISTORY  OF  THE  FORMA¬ 
TION  OF  OUR  COTTON  AND  TOBACCO  CO¬ 
OPERATIVE  MARKETING  ASSOCIATIONS 

TJie  Speculative  Market  Failed 

Although  the  demand  and  use  of  our  cotton  and 
tobacco  have  increased  steadily  the  last  quarter 
century,  the  economic  history  of  the  growers  dur¬ 
ing  that  period  has  been  a  succession  of  want, 
misery,  and  poverty.  Since  1896  four  campaigns 
for  crop  reduction  have  been  waged  by  the  cotton 
growers,  only  to  find  a  few  years  later  the  world 
famishing  for  cotton  at  satisfactory  prices.  Th< 
experts  of  the  United  States  Department  of  Agri¬ 
culture  find  that  during  the  last  quarter  century 
tobacco  growers  have  made  money  five  years 
broke  even  five  years,  and  lost  money  fifteen. 

The  Results  of  This  Failure 

These  bad  economic  conditions  among  the  cot¬ 
ton  and  tobacco  growers  have  resulted  in  robbery 
of  the  soil  and  robbery  of  the  women  and  children 
The  fertility  has  been  taken  from  the  soil  and  tin 
chances  for  betterment  taken  from  the  women  anc 
children.  The  women  and  children  have  gone  tc 
the  cotton  and  tobacco  fields  instead  of  to  tin 
homes  and  schools,  and  the  standards  of  living  ii 
the  country  have  lagged  behind. 

The  Attempts  to  Improve 

Many  attempts  have  been  made  to  improve  thes» 
bad  economic  conditions  among  the  growers 

6 


Farmers’  Alliance  pools  and  warehouses,  Farmers’ 
Jmon  pools  and  warehouses,  acreage  reduction 
armer-owned  stores  and  other  methods  were  tried 
o  improve  these  conditions  among  the  growers, 
>ut  their  results  were  only  minor  and  temporary! 

War-Time  Prices 

Then  came  the  war  with  its  prices,  and  the 
;rowers  forgot  their  troubles.  Cotton  rose  from 
i  low  of  6  cents  in  1914  until  in  1919  it  reached 
peak  of  43  cents  a  pound,  and  tobacco  rose  from 
n  average  in  the  three  states,  Virginia  and  the 
larolinas,  of  10%  cents  a  pound  in  1914  to  45% 
;ents  a  pound  average  for  1919. 

Then  Came  1920 

In  1920  a  crop  of  tobacco  which  had  an  esti¬ 
mated  cost  of  production  in  the  three  states  of 
0  cents  a  pound  was  sold  for  an  average  of  about 
0  cents  a  pound,  and  cotton  with  an  estimated 
i>st  of  production  of  30  cents  a  pound  sold  for  as 
>w  as  eight  cents  a  pound.  This  complete  cok  ^ 
ipse  of  the  growers’  market  convinced  all  think- 
ig  farmers  that  there  was  no  remedy  for  the 
>eculative  system  but  abolishment.  Campaigns 
>r  acreage  reduction  of  cotton  and  tobacco  began 
^mediately  and  meetings  were  held  to  solve  the 
tuation. 

Aaron  Sapiro  Came 

Some  one  had  heard  that  California,  a  great 
pficultural  State,  had  not  suffered  from  the  1920 
fllapse  as  had  other  sections  of  the  country,  and 
at  even  in  1920  four  out  of  five  California 


7 


growers  made  money.  An  investigation  was  made 
and  it  was  found  that  California  growers  at¬ 
tributed  tbeir  1920  prosperity  to  the  fact  that 
eacli  year  they  sell  around  three  hundred  millions 
of  dollars  of  their  product  through  cooperative 
commodity  marketing  associations.  California 
growers  were  asked  to  send  Virginia-Carolina 
growers  their  best  expert  to  teach  them  this  sys¬ 
tem  of  cooperative  commodity  marketing.  .Thus 
came  Aaron  Sapiro. 

Cooperative  Commodity  Marketing  Was  Adopted 

Aaron  Sapiro  explained  this  plan  of  cooperative 
f  commodity  marketing  to  Virginia  growers  at 
Lynchburg,  January  11,^1921;  North  Carolina 
1  growers  at  Raleigh,  January  12  and  13,  1921,  and 
South  Carolina  growers  at  Florence,  January  14 
1921.  Sapiro  also  told  the  growers  in  these  meet¬ 
ings  how  agriculture  and  rural  life  had  developed 
in  California  with  group  marketing,  how  the 
average  California  farmer  produced  $5,000  worth 
of  products  each  year,  compared  to  $2,300  average 
for  the  United  States,  and  how  California  grew 
$309  worth  of  crops  for  every  man,  woman,  and! 
child  living  on  the  farms,  vdiich  vTas  $110  mort 
per  person  than  was  produced  in  Kansas,  the  nexl 
highest  State,  and  almost  four  times  as  much  as 
the  per  capita  production  of  certain  cotton  anc 
tobacco  producing  states.  He  told  them  how  croj 
values  in  California  had  declined  less  than  anj 
State  in  the  Union,  and  of  splendid  roads,  schools 
churches,  and  homes  the  prosperous  Californh 
farmers  had  built.  Listening  to  these  almost  un 


8 


believable  facts,  the  growers  in  their  mass  meet¬ 
ings  adopted  the  cooperative  commodity  market¬ 
ing  plan,  the  contract  was  drawn  up,  organization 
committees  .appointed,  and  the  movement  was 
under  way. 

The  Sign-Up  Campaigns 

The  organization  committees  of  the  Tobacco 
Growers  Cooperative  Association  and  the  North 
i  Carolina  Cotton  Growers  Cooperative  Association 
vere  given  until  January  1,  1922,  to  complete  the 
pign-up  of  growers  of  SO  per  cent  of  the  tobacco 
md  growers  of  two  hundred  thousand  bales  of 
;otton  in  1920  in  order  to  make  the  contracts  valid. 

The  living  history  of  these  great  campaigns 
vaged  by  the  farmers  themselves  in  the  face  of 
Te  vicious  opposition  by  certain  of  the  specula- 
five  interests  will  never  be  blurred  in  the  minds  of 
my  who  took  part  therein.  Suffice  to  say,  the 
pal  was  reached  by  January  1,  1922,  and  the 
dinners’  organizations  emerged  victorious  with 
>5,000  members  of  the  tobacco  association  and 
56,000  members  of  the  cotton  association.  Janu- 
ry  h  1923,  85,000  growers  compose  the  tobacco 
issociation,  and  32,000  growers  compose  the  cot¬ 
on  association. 


>\ 


9 


4.  DESCRIPTION,  CONTROL,  AND  FUNCTIONS 
OF  OUR  ORGANIZATIONS 

The  Organization  and  Control  of  the  Central  Office; 

The  central  office  of  the  tobacco  association  con 
sists  of  a  warehouse,  a  leaf,  a  finance,  a  legal,  an( 
a  field  service  department. 

The  central  office  of  the  cotton  association  con 
sists  of  a  warehouse,  a  sales,  a  finance,  a  legal,  anc 
a  field  service  department; 

The  central  office  of  the  tobacco  association  if 
controlled  by  25  directors,  22  of  whom  are  electee 
by  the  members  and  three  of  whom  are  appointee 
by  the  governors  of  the  three  states  to  safeguare 
the  interests  of  the  public. 

Officers  of  Tobacco  Association 

T.  C.  Watkins,  elected  director  from  Halifax 
County,  Virginia,  is  in  direct  charge  of  the  ware 
house  department. 

R.  R.  Patterson,  formerly  head  of  the  leal 
department  of  the  American  Tobacco  Company 
is  in  direct  charge  of  the  leaf  department. 

Oliver  J.  Sands,  public  director  appointed  b^ 
the  Governor  of  Virginia,  is  in  direct  charge  oi 
the  finance  department. 

Aaron  Sapiro  is  general  counsel,  and  he  has 
direct  charge  of  the  legal  department.  Associated 
with  him  is  Major  W.  T.  Joyner  of  Raleigh, 
K  C. 

M.  O.  Wilson,  secretary  of  the  association 
elected  director  from  Charlotte  and  Prince  Ed- 


10 


ward  counties,  Virginia,  is  in  direct  charge  of  the 
held  service  department. 

Supervising  these  department  heads  are  the  25 
directors  who  safeguard  the  interests  of  the  mem¬ 
bers  and  of  the  public.  George  A.  Norwood, 
elected  director  of  Goldsboro,  North  Carolina  is 
president  of  this  board  of  directors. 

Officers  of  Cotton  Association 

dhe  central  office  of  the  cotton  association  in 
Raleigh  is  controlled  by  11  directors.  10  of  whom 
iare  elected  by  the  members  and  one  appointed  by 
the  Governor  of  North  Carolina  to  safeguard  the 
mterests  of  the  public. 

.  The  direct  executive  head  of  the  cotton  asso¬ 
ciation  s  central  office  is  the  general  manager, 
P"*  T.  Blalock,  of  Wadesboro,  prominent  business 
|nan  and  farmer.  He  was  a  member  of  the  or¬ 
ganization  committee,  and  was  a  pioneer  in  the' 
cooperative  movement. 

B.  E.  Brown,  former  director  of  markets  for 
he  State  of  North  Carolina,  is  in  direct  charge  of 
he  cotton  department,  which  looks  after  the  stor- 
ng,  insuring,  grading,  and  transportation  of 
•otton. 

Lawrence  MacRae,  experienced  cotton  mill  man, 
s  sales  manager  of  the  association. 

Ashley  E.  Bing,  former  national  bank  examiner, 
vho  is  secretary-treasurer  of  the  association,  is  in 
harge  of  the  finance  and  accounting  departments. 

Aaron  Sapiro  is  general  counsel  and  has  direct 
harge  of  the  legal  department.  Associated  with 
lim  is  Cale  K.  Burgess  of  Raleigh,  N.  C.  A" 

~ir 


A  Homer  H.  B.  Mask,  formerly  connected  with 
the  North  Carolina  Agricultural  Extension  Serv¬ 
ice,  lias  direct  charge  of  the  field  service  depart¬ 
ment. 

Supervising  these  department  heads  are  the 
eleven  directors  who  safeguard  the  interests  of  the 
members  and  of  the  public.  W.  H.  Austin  ot 
Smithfield  is  president  of  the  board  of  directors. 

The  Functions  of  the  Departments 

The  warehouse  departments  of  the  two  associa¬ 
tions  provide  the  ways  and  means  of  receiving  and 
storing  cotton  and  tobacco,  and  are  responsible  foi 
it  while  it  is  passing  from  grower  to  manufac¬ 
turer.  Insurance  is  carried  on  both  warehouses 
and  product  in  order  to  safeguard  the  grower  and 
the  banker  who  lends  money  for  advances. 

The  leaf  department  of  the  tobacco  association 
grades  the  tobacco  into  pools,  the  standards  for 
which  have  been  set  up  after  the  most  careful  study 
in  cooperation  with  the  manufacturers  and  con¬ 
sumers.  The  warehouses  are  owned  and  controlled 
by  subsidiary  corporations,  and  the  plan  of  or¬ 
ganization  contemplates  their  eventual  ownershi 
by  the  growers. 

Cotton  is  stored  in  government-licensed  and 
bonded  warehouses,  and  the  grading  is  done  by 
expert  graders  under  government  supervision,  am 
according  to  government  standards.  All  ware 
housemen  are  bonded,  and  they  work  under  govern 
ment  regulations  and  under  government  inspec 
tion.  This  is  made  possible  by  the  State-licensee 
warehouse  system,  which  is  used  exclusively  by 
the  cotton  association. 


12 


A  careful  study  of  supply,  demand,  and  market 
conditions  is  made  and  steps  taken  to  sell  the 
product  at  a  fair  price  for  the  grower.  The  sales 
policies  are  determined  by  the  boards  of  directors 
of  the  respective  associations,  with  the  advice  of 
experts,  who  are  in  touch  with  conditions  affecting 
the  market.  Expert  sales  managers  have  been 
employed  to  give  their  entire  time  to  this  impor- 
;ant  work. 

The  finance  departments  secure  the  funds  for  ~ 
advances,  and  when  sufficient  sales  are  made,  re¬ 
pay  these  loans  and  make  returns  to  the  growers 
*or  each  pound  delivered  to  the  associations. 
5very  man  connected  with  these  departments 
charged  with  handling  funds  is  heavily  bonded. 

The  legal  departments  guide  the  whole  organi- 
;ations  in  its  contact  with  legal  matters  and  pay 
pecial  attention  to  growers  who  violate  their 
igreements  with  their  neighbors  by  selling  on  the 
>utside. 

!  The  field  service  departments  aid  the  growers 
n  increasing  the  membership,  furnish  the  growers 
fith  information  regarding  their  association, 
upervise  the  organization  of  locals  and  county 
nits,  keep  the  central  organizations  informed  as 
o  the  needs  and  desires  of  the  growers,  furnish 
re  growers  with  information  and  aid  in  improv- 
tig  and  standardizing  tlieir  product,  and  in  many 
rays  help  the  growers  to  control  their  &ssocia- 
ions,  to  improve  their  products,  and  to  make 
arming  pay.  The  field  service  departments,  by 
leir  intimate  contact  with  the  growers,  are  en- 
bled  to  render  them  valuable  service. 


13 


The  Organization  of  the  Growers 

Every  grower  is  a  member  of  a  local,  whic 
meets  regularly  at  the  schoolhouse.  Each  loct 
lias  a  chairman,  vice-chairman,  and  secretary 
These  local  officers  and  other  delegates  compos 
the  county  association,  which  meets  regularly  one 
a  month  at  the  courthouse. 

The  Function  of  the  Local  and  County  Units 

These  local  and  county  units  have  five  mai 
functions.  These  functions  are  : 

1.  Securing  deliveries  and  maintaining  the  lo^ 
alty  to  the  associations  by  educating  their  men 
bers  regarding  cooperative  marketing. 

2.  Increasing  the  membership  of  the  assoch 
tions. 

3.  Controlling  the  associations  by  reporting  1 
the  directors  and  department  managers  all  ineb 
ciency  and  disloyalty  of  employees  and  otherwh 
advising  with  their  directors. 

4.  Improving  the  product  by  adopting  standar 
seed,  better  methods  of  production  and  harvesting 

5.  Reporting  all  statistics  as  the  departmei 
managers  shall  request. 


14 


SOME  QUESTIONS  ASKED  AND  THEIR 

ANSWERS 


I  Wliat  are  locals? 

I  They  are  branches  of  the  associations  composed  only 
F  growers,  officered  only  by  growers,  and  their  pur- 
ose  is  to  promote  cooperative  marketing  and  better 
irming. 

I  Why  is  it  necessary  to  have  local  and  county  organi- 
jitions? 

■  Because  the  cotton  and  tobacco  associations  are 
imposed  of  growers,  are  run  by  growers,  and  exist 
|>lely  to  benefit  the  growers.  In  order  to  act  intelli- 
?ntly,  members  must  be  informed,  and  must  also 
scuss  the  many  problems  connected  with  cooperative 

Iarketing.  If  it  were  possible,  it  would  be  better  to 
ive  all  the  members  come  together  in  one  place, 
be  next  best  thing  is  the  community  unit.  Here 
embers  may  get  reports  from  headquarters,  discuss 
em,  and  make  suggestions  as  to  the  future  conduct 
!  the  associations. 

(Does  the  marketing  agreement  and  contract  comply 

I 

law. 

Absolutely  so.  It  has  been  submitted  to  and  has 
)od  the  test  of  inspection  by  the  State  courts  and 
e  Federal  Trade  Commission,  and  it  has  been  ex- 
lined  by  competent  attorneys  and  judges  and  pro- 
unced  legal,  fair  and  reasonable. 

iWhy  is  it  necessary  to  have  a  five-year  contract? 
For  a  number  of  excellent  reasons.  One  is  to  insure 
it  all  of  the  members  will  stick  for  that  long  a  time, 
iiother  is  to  insure  that  the  associations  will  have  a 
finite  volume  of  business,  so  that  an  adequate  selling 


organization  can  be  set  up  and  maintained.  A  third 
reason  is  that  it  will  not  pay  to  go  into  associations 
of  this  sort  except  for  at  least  five  years,  so  that  the 
amount  of  business  done  during  that  time  will  reduce 
the  overhead  expense  necessary  to  get  them  started 
A  fourth  reason  is  that  competent  salesmen  and  mana¬ 
gers  cannot  be  hired  for  just  one  year.  A  fifth  and 
very  important  reason  is  that  manufacturers,  export¬ 
ers,  bankers  and  others  will  not  do  business  with  an 
organization  that  will  remain  in  business  for  only  a 
short  time. 

Can  a  member  sign  for  half  or  part  of  his  crop? 

He  cannot.  Would  you  want  to  give  any  member  the 
privilege  of  selling  half  or  part  of  his  crop  througl 
the  association  and  of  selling  the  other  part  to  a 
speculator  who  would  work  directly  against  the  asso¬ 
ciation? 

What  does  a  member  obligate  himself  to  do  whet 
he  signs  the  marketing  contract? 

To  sell  all  of  crop  through  the  association  for  a 
period  of  five  years. 

What  happens  to  the  member  if  the  association  goes 
into  court  to  prevent  breach  of  contract? 

The  grower  not  only  has  to  pay  liquidated  damages 
for  breach  of  contract,  but  he  also  has  to  pay  all  costs 
of  suits  and  is  restrained  by  injunction  from  selling 
outside  of  the  association. 

Why  are  these  cooperative  associations  made  s( 
strong  ? 

To  prevent  the  weak-kneed  from  sliding  out  and  t< 
prevent  any  possible  breaking  of  the  associations.  Als< 
to  prevent  outsiders  and  speculators  from  tempting 


16 


y  temporary  high  prices,  members  to  forsake  the 
ssociations  and  thus  to  destroy  them. 

How  much  do  the  associations  charge  for  handling, 
rading,  warehousing  and  selling  the  cotton  of  mem- 
ers? 

Not  a  cent  more  than  it  actually  takes  to  do  this 
^rvice.  Each  member  will  get  the  maximum  net  pro- 
seds  for  his  crop,  less  the  actual  cost  of  running  the 
ssociation. 

What  about  damaged  cotton  or  tobacco? 

If  the  damage  is  the  result  of  carelessness  on  the 
art  of  the  member,  such  loss  will  be  charged  against 
,ie  member.  If  the  damage  occurs  after  the  cotton  or 
|»bacco  is  delivered  to  the  association,  the  association 
ill  stand  the  loss.  This  is  one  of  the  risks  that  every 
psiness  undertaking  has  to  take,  but  by  storing  in 
arehouses  and  insuring  it,  this  source  of  loss  will  be 
inimized  or  eliminated  entirely. 

Will  the  associations  hold  cotton  and  tobacco? 

Yes,  if  it  is  necessary  to  do  so,  but  they  are  not 

I  tiding  institutions,  and  their  purpose  is  to  sell  the 
op  at  such  times  and  in  such  amounts  as  will  best 
rve  the  interests  of  members. 

Do  the  associations  guarantee  the  member  any 
rtain  price? 

jThey  dojiot.  The  contract  provides  that  the  associa- 
>n  will  sell  the  members’  cotton  or  tobacco  at  the 
st  price  obtainable  on  the  market.  Neither  the 
sociation  nor  any  one  else  can  guarantee  what  the 
Jirket  will  be. 

Why  are  the  cooperative  associations  called  non- 
bfit? 

i 


17 


Because  all  of  the  money  received  from  sales  after 
the  expenses  of  selling  are  paid  goes  to  the  grower. 
He  receives  all  that  his  cotton  or  tobacco  brings,  less 
the  expense  of  selling  it. 

Will  my  good  grades  of  cotton  and  tobacco  bej30ol§d( 
with  the  sorry  grades  of  my  neighbors? 

No.  All  cotton  and  tobacco  of  similar  grade  and 
class  is  pooled  together,  insuring  to  each  grower  of 
good  products  the  benefit  he  merits  from  his  care  in 
improving  it.  All  members  whose  cotton  or  tobacco 
is  of  the  same  grade  and  class  will  receive  the  same 
price. 


Do  I  have  to  pay  interest  on  money  that  is  borrowed 
to  make  advances  on  cotton  and  tobacco? 

Yes,  you  will  have  to  pay  your  pro  rata  share  ox 
the  interest.  Interest  on  borrowed  money  is  included 
as  a  part  of  the  overhead  cost  of  operating  the  asso 
ciation.  This  is  exactly  the  same  as  is  done  by  any 
other  business  organization. 


Suppose  I  do  not  take  my  cash  advance  when  1 
deliver  my  cotton  or  tobacco,  will  I  get  interest  on  the 
amount  of  money  to  which  I  am  entitled  but  which  1 
leave  with  the  association? 

No.  The  boards  of  directors  found  it  would  provt 
too  costly  to  undertake  to  open  up  so  many  smal 
borrowing  accounts;  and,  therefore,  all  members  wer 
earnestly  urged  to  take  their  advance  when  the, 
delivered  their  cotton  or  tobacco.  It  was  also  desire 
to  distribute  the  advances  as  widely  as  possible  ii 
order  that  business  might  be  stimulated.  Money  tend1 
to  flow  toward  the  large  business  centers ;  cooperativi 
marketing  seeks  to  keep  money  well  distributed  in  ai 
orderly  manner  to  help  stabilize  conditions. 

18 


& 


oc 

Hi 


CONTRACTS  BASIS  OF  BUSINESS 

Membership  contracts  of  the  cotton  and  tobacco 
ssociations  are  the  basis  of  their  existence.  With- 
ut  them  there  would  be  no  assurance  of  a  suffi- 
ient  volume  of  business  to  justify  setting  up  ma- 
hinery  for  handling  it. 

It  is  evident  that  they  must  be  binding  con¬ 
tacts.  This  fundamental  principle  is  not  con¬ 
ned  to  cooperative  selling  associations.  It  ap- 
lies  to  all  modern  business  undertakings.  If 
len  entering  into  agreement  to  do  or  not  to  do  a 
mtain  particular  thing,  which  is  all  that  a  con¬ 
tact  is,  were  permitted  to  violate  their  solemn 
romises  at  will,  orderly  conduct  of  ordinary  busi- 
ess  affairs  would  he  impossible.  Confidence 
ould  be  broken  down,  and  without  confidence 
lere  could  be  no  stability.  Destroy  confidence 
pd  stability,  and  you  destroy  all  business. 

I  Contracts  become  mere  scraps  of  paper  if  they 
be  not  enforced.  Checks  on  a  hank  would  he 
orth  nothing  unless  there  are  funds  to  meet  them 
jhen  they  are  presented  for  payment  and  they 
re  accepted.  In  ordinary  business  relations, 

['  ecks  are  treated  in  the  same  way  as  money,  hut 
is  because  of  the  reasonable  assurance  that  those 
gning  them  will  keep  their  solemn  obligation. 
Sacredness  of  contract,  then,  is  not  peculiar  to 
•operative  selling  associations.  It  holds  for  all 
isiness.  It  is  to  the  everlasting  credit  of  the 
j.rmers  that  they  have  given  the. lie  once  for  all 
i  the  slanderous  charge  that  they  will  not  keep 

19  * 


their  solemn  obligations.  The  fine  record  made  by 
the  cotton  and  tobacco  associations  the  past  year 
shows  that  farmers  are  as  careful  to  keep  their 
word  as  any  other  class  of  people. 

The  courts  of  every  state,  including  North  and 
South  Carolina,  and  Virginia,  wherever  the  va¬ 
lidity  of  one  of  our  contracts  has  been  brought 
before  a  judge,  have  held  without  exception  that 
the  agreements  made  by  growers  to  market  their 
own  products  are  fair,  reasonable,  just  and  legal. 
It  has  been  uniformly  held  that  farmers  have  the 
same  right  to  make  contracts  that  anybody  else 
has,  and  that  it  is  not  special  privilege  to  permit 
him  to  organize  for  the  orderly  sale  of  his  cotton 
and  tobacco. 

LOYALTY  MUST  BE  WATCHWORD 

Compliance  with  the  contract  by  members  of 
cooperative  associations,  however,  is  the  negative 
side  of  the  proposition.  There  ought  never  to  he 
any  question  about  it.  There  will  not  be  in  the 
future.  It  will  be  taken  for  granted  that  when  a 
grower  of  cotton  and  tobacco  signs  a  contract  of 
membership,  he  is  going  to  live  up  to  his  contract. 
But  that  is  not  enough. 

In  order  to  grow  and  prosper,  the  cooperative 
associations  must  have  the  active,  positive,  loyal 
support  of  members.  They  must  do  more  thar 
keep  their  contract.  They  must  put  their  should¬ 
ers  to  the  wheel  and  make  the  associations  live 
living,  breathing  organizations.  They  must  meei 
with  other  members  and  thresh  out  with  them  the 
many  problems  that  must  be  solved  before  tin 


20 


cooperative  associations  can  achieve  their  highest 
and  best  success. 

Loyalty  to  the  associations  does  not  mean  that  a 
member  must  calmly  submit  without  a  murmur  of 
protest  to  had  treatment  he  may  receive,  either  in¬ 
tentionally  or  unintentionally,  from  those  who 
have  been  placed  in  charge  of  the  selling  organiza¬ 
tions.  It  is  his  business  to  kick,  if  he  feels  that  he 
isn’t  receiving  a  square  deal,  hut  it  should  be  con¬ 
structive  criticism.  He  should  endeavor  to  kick  in 
a  way  that  a  similar  mistake  will  not  be  made 
again.  He  should  have  the  good  of  the  associa¬ 
tion  at  heart  with  a  view  always  to  helping  it  to 
give  good  service  to  members. 

It  will  aid  materially  in  building  up  the  morale 
jof  the  associations  and  in  facilitating  attention  to 
|  complaints,  if  they  are  made  through  duly  elected 
officers  of  local  organizations.  It  will  give  greater 
weight  to  a  complaint  and  will  enable  other  mem- 
jbers  to  have  the  benefit  of  the  information.  Help 
your  associations  to  give  good  service  by  attending 
Imeetings  of  your  locals. 


I 


i 


21 


LOCAL  ORGANIZATIONS 


If  You  Live  in  South  Carolina 

In  counties  growing  both  cotton  and  tobacco,  local 
units  are  joint  organizations  of  members  of  the  To¬ 
bacco  Growers  Cooperative  Association  and  the  South 
Carolina  Cotton  Growers  Cooperative  Association.  For 
information  about  locals  in  this  territory,  write  to 
W.  E.  Lea,  Tobacco  Growers  Cooperative  Association, 
Florence,  S.  C.,  or  to  H.  C.  Booker,  S.  C.  Cotton 
Growers  Cooperative  Association,  Columbia,  S.  C. 

If  You  Live  in  Eastern  North  Carolina 

In  a  county  where  both  cotton  and  tobacco  are 
grown,  local  units  include  members  of  both  the  North 
Carolina  Cotton  Growers  Cooperative  Association  and 
the  Tobacco  Growers  Cooperative  Association.  For 
information,  write  to  either  association  at  Raleigh. 
N.  C. 

If  You  Live  in  Western  N.  C.  or  Virginia 

In  this  territory,  where  no  cotton  is  grown,  local 
units  comprise  only  the  members  of  the  Tobacco 
Growers  Cooperative  Association.  For  information, 
write  to  Raleigh  headquarters  of  the  association. 

If  You  Live  in  the  Southern  Piedmont  North  Caro¬ 
lina 

In  these  counties,  where  no  tobacco  is  grown,  local 
units  comprise  only  members  of  Cotton  Association. 
For  information,  write  to  H.  H.  B.  Mask,  N.  C.  Cotton 
Growers  Cooperative  Association,  Raleigh,  N.  C. 


22 


PUBLICATIONS 


Literatiue  on  cooperative  marketing  is  becom¬ 
ing  voluminous,  and  numerous  books  on  the  sub- 
I  ject  oi  marketing  have  recently  come  from  the 
■j  press.  As  a  beginning  for  a  study  of  this  subject, 
i  the  following  two  books  are  recommended: 

“Efficient  Marketing  for  Agriculture,”  by  T.  Mack- 
)  lin.  Published  by  Macmillan  Co.,  New  York.  Price, 
,  $3 ;  postage,  10  cents. 

i  “Cooperation  in  Danish  Agriculture,”  by  Faber. 
Published  by  Longmans,  Green  Co.,  New  York  Price 
£3.25. 

These  two  books  will  furnish  a  ground  work, 

]  but  for  those  wishing  a  more  thorough  knowledge 
j[>f  the  beginnings  of  this  important  cooperative 
movement,  we  recommend  : 

“Marketing  Agricultural  Products,”  by  Hibbard. 
Published  by  D.  Appleton  &  Co.,  New  York.  Price, 
>2.50. 

“Cooperation  in  Agriculture,”  by  Powell.  Published 
1  )y  Macmillan  Co.,  New  York.  Price,  $2.50 ;  postage, 

0  L0  cents. 

l(  “Denmark,  a  Cooperative  Commonwealth,”  by  Howe. 
Published  by  Harcourt,  Brace  &  Co.,  New  York. 
Price,  $2. 

'■  “How  Farmers  Cooperate  and  Double  Profits,”  by 
Poe.  Published  by  Progressive  Farmer  Publishing 
jj  So.,  Raleigh,  N.  C.  Price,  $1. 

1  Except  where  noted,  the  price  includes  the  post¬ 
age.  These  books  may  be  ordered  direct  from  the 
aublishers  or  they  may  be  ordered  through  Alfred 
Williams  &  Co.,  Raleigh,  E”.  C. 

23 


BULLETINS 

Important  bulletins  published  by  the  Bureau  of 
Agricultural  Economics,  Department  of  Agiicul- 
ture,  which  may  be  obtained  for  the  price  named 
from  the  superintendent  of  documents,  Govern¬ 
ment  Printing  Office,  Washington,  D.  C.,  are  as 
follows : 

“One  Variety  Cotton  Communities,”  by  O.  F.  Cook, 
U.  S.  Department  of  Agriculture  Bulletin,  No.  1111. 
Price,  10  cents. 

“Legal  Phases  of  Cooperative  Associations,”  by  L.  S. 
Hulbert,  U.  S.  Department  of  Agriculture  Bulletin, 
No.  1106.  Price,  15  cents. 

“Producers  Cooperative  Milk  Distributing  Plants, 
by  O.  B.  Jesness.  U.  S.  Department  of  Agriculture 
Bulletin,  No.  1095.  Price,  10  cents. 

“Cooperative  Grain  Marketing,”  by  J.  M.  Melil. 
U.  S.  Department  of  Agriculture  Bulletin,  No.  937. 
Price,  5  cents. 

“The  Organization  of  Cooperative  Grain  Elevator 
Companies,”  by  J.  M.  Mehl,  U.  S.  Department  of 
Agriculture  Bulletin,  No.  860.  Price,  10  cents. 

“Cooperative  Marketing,”  Farmers’  Bulletin,  No. 
1144,  U.  S.  Department  of  Agriculture,  Washington, 
D.  C. 

“Three  Centuries  of  Tobacco.”  Separate  805  Year¬ 
book,  U.  S.  Department  of  Agriculture,  1919,  Wash¬ 
ington,  D.  C. 

“Tobacco  Culture.”  Farmers’  Bulletin  571. 

“Authorizing  Associations  of  Producers  of  Agricul¬ 
tural  Products,”  from  Congressmen.  H.  R.  2373. 


24 


OTHER  BULLETINS 

Write  direct^  to  the  address  indicated  if  you 
want  the  bulletins  named  : 

Report  of  American  Cotton  Association,  1920.  Har- 
vie  Jordan,  St.  Matthews,  S.  C. 

Marketing  Problems  of  Minnesota  Farmers,”  by 

Hughes,  State  Department  of  Agriculture,  St.  Paul. 
Minn. 

“Tobacco  Marketing  in  United  States,”  by  E.  H. 
Matthewson,  U.  S.  D.  A.,  Bureau  of  Plant  Industry, 
Washington,  D.  C. 

PERIODICALS 

First-hand  information  on  the  sound  principles 
of  cooperative  marketing  and  important  news 
about  its  development  is  carried  every  week  by 

The  Progressive  Farmer,  Raleigh,  1ST.  C.,  subscrip- 
pon,  $1. 

Without  exception,  agricultural  papers  are 
keeping  in  touch  with  cooperative  marketing,  and 
irticles  on  the  movement  have  found  thei/way 
nto  practically  all  magazines  and  periodicals  of 
wery  class  during  the  past  year. 

Start  today  to  establish  a  library  on  cooperative 
narketing.  It  will  be  the  means  of  obtaining 
>ractical  information  that  you  should  have. 

SOURCES  OF  INFORMATION 

From  time  to  time  state  and  national  agricul- 
ural  departments  issue  publications  of  interest  to 
obacco  and  cotton  growers,  and  with  the  present 
nterest  in  cooperative  marketing  these  depart- 

25 


ments  may  issue  more  bulletins  on  cooperative 
marketing. 

Your  Congressman  may  be  able  to  supply  you 
with  bulletins  issued  by  the  U.  S.  Department  of 
Agriculture  at  Washington,  D.  C. 

Write,  also,  to  your  State  Department  of  Agri¬ 
culture,  to  your  State  College,  or  Agricultural 
Extension  Service.  A  list  of  addresses  follows : 

George  Y.  Koiner,  Commissioner  of  Agriculture, 
Richmond,  Ya. 

John  R.  Hutcheson,  Director  of  Extension,  Blacks¬ 
burg,  Ya. 

\V.  A.  Graham,  Commissioner  of  Agriculture,  Ra¬ 
leigh,  N.  C. 

B.  W.  Kilgore,  Director  N.  C.  .Agricultural  Exten¬ 
sion  Service  and  Experiment  Station,  Raleigh,  N.  C. 

U.  Harris,  Commissioner  of  Agriculture,  Columbia 
S.  C. 

W.  W.  Long,  Director  Agriculture  Extension  Work, 
Clemson  College,  S.  C. 

Tobacco  Experiment  Station,  Oxford,  N.  C. 


i 

( 

t 


26 


SOUTHERN  COTTON  COOPERATIVE 
ASSOCIATIONS 

Alabama  Farm  Bureau  Cotton  Association,  Mont¬ 
gomery,  Ala. 

Arizona  Pimacotton  Growers  Association,  Phoenix, 
Ariz. 

Arkansas  Cotton  Growers  Cooperative  Association, 
Little  Rock,  Ark. 

Georgia  Cotton  Growers  Cooperative  Association, 
Atlanta,  Ga. 

Mississippi  Farm  Bureau  and  Cotton  Association, 
Jackson,  Miss. 

North  Carolina  Cotton  Growers  Cooperative  Asso¬ 
ciation,  Raleigh,  N.  C. 

Oklahoma  Cotton  Growers  Cooperative  Association, 
Oklahoma  City,  Okla. 

South  Carolina  Cotton  Growers  Cooperative  Asso¬ 
ciation,  Columbia,  S.  C. 

Texas  Farm  Bureau  Cotton  Association,  Dallas,  Tex. 

These  nine  state  cooperative  selling  associations  are 
affiliated  with  the  American  Cotton  Growers’  Ex¬ 
change,  of  Dallas,  Tex.,  which  acts  in  a  general  super¬ 
visory  capacity  with  a  view  to  preventing  duplication 
of  effort  in  securing  information  about  market  con¬ 
ditions  and  methods  of  business. 


27 


PRICES  OBTAINED  BY  PRODUCERS  OF 
COTTON,  1915-1921 


(Averages  compiled  by  the  Bureau  of  Crop  Esti¬ 
mates,  Department  of  Agriculture.  High  and  low 
prices  from  New  York  Exchange.) 

Year  Average  Low  High 

1921  .  16.90  12.80  23.75 

1920  .  15.84  10.85  40.00 

1919  .  35.36  27.00  43.00 

1918  . ; .  28.76  25.00  38.20 

1917  .  27.12  21.20  36.00 

1916  .  17.28  13.36  27.65 

1915  .  11.22  9.20  13.45 


COTTON  PRODUCTION  IN  UNITED  STATES 

Year  Bales 

1921  .  7,953,641 

1920  .  13,439,603 

1919  .  11,420,763 

1918  . 12,040,532 

1917  . 11,302,375 

1916  . : . . .  11,449,930 

1915  .  11,191,820 


28 


Cotton  Acreage  and  Production  by  States,  1921 


States. 

Acres. 

Bales. 

Virginia . 

34,000 

17,000 

North  Carolina _  . 

1,403,000 

776,000 

South  Carolina _ _ _ _ 

2,571,000 

755,000 

Georgia _  _ _ 

4,172,000 

787,000 

Florida . . _ 

65,000 

11,000 

Alabama  .  . . .  . 

2,235,000 

580,000 

Mississippi _  .  . 

2,628,000 

813,000 

Louisiana . .  . . . 

1,168,000 

279,000 

Texas . .  . . 

10,745,000 

2,198,000 

Arkansas . . , . 

2,382,000 

797,000 

Tennessee _ _  _  .  .  .. 

634,000 

302,000 

Missouri . . . . . . 

103,000 

70,000 

Dklahoma.  . . . . 

2,206,000 

481,000 

California _ _  _ 

140,000 

34,000 

Arizona...  _ _  _  ..  _ _ _ 

90,000 

45,000 

til  others _  .  ..  _  _ 

18,000 

9,000 

United  States _ _ _ 

30,509,000 

7,954,000 

29 


North  Carolina  Cotton  Crop  by  Counties,  1922 

Furnished  by  cooperative  crop  reporting  service  of  U.  S.  and  N.  C. 


County. 

Production 

Bales, 

1922. 

County. 

Production 

Bales, 

1922. 

Alamance. _ _  .. 

1,463 

Johnston _ 

/  55,447 

Alexander _ _ _ _ 

1,469 

Jones _ _ _  _ 

3,448 

Anson... . 

24,679 

Lee _ _  _ 

8,394 

Beaufort.  ..  _  .  .. 

12,291 

Lenoir...  ..  _ 

11,604 

Bertie _ _ _ 

13,766 

Lincoln _  _  ..  _ 

9,097 

Bladen.. . 

6,626 

Martin _ _ _ 

8,850 

Brunswick. .  .  _ 

30 

Mecklenburg.  _ _ 

19,490 

Burke _  _ _ 

337 

Montgomery _ _ 

4,686 

Cabarrus...  _ 

11,897 

Moore _ _ 

3,664 

Caldwell _ _ _ 

72 

Nash _  _ _ 

27,207 

Camden _  _  .. 

1,950 

New  Hanover _  .. 

440 

Carteret _ _ _ 

1,207 

Northampton _  _ 

21,037 

Catawba _  _ _ 

10,613 

Onslow..  _ _ _ 

3,661 

Chatham..  .  _ _ 

8,581 

Orange  . 

1,538 

Chowan _  _ _ 

5,545 

Pamlico . . 

4,167 

Cleveland.  .  .  _ 

35,128 

Pasquotank  ..  _ 

4,482 

Columbus . .  .. 

1,031 

Pender _ _  _ 

1,874 

Craven...  _ _ 

4,284 

Perquimans 

6,146 

Cumberland _ ...  . 

20,665 

Pitt..  . . . 

22,195 

Currituck _ ...  . 

628 

Polk _ 

2,809 

Dare _  .  _ 

14 

Randolph. 

1.170 

Davidson  ..  ... 

1,961 

Richmond . 

26,733 

Davie _  .  . 

2,396 

Robeson. 

41,708 

Duplin..  _  .  .  v 

6,866 

Rowan. 

11,675 

Durham _ _ * 

850 

Rutherford 

11,950 

Edgecombe. . .  . 

37,624 

Sampson.. 

28,759 

Forsyth  _ _ _ 

99 

Scotland. 

26,987 

Franklin . . . 

16,415 

Stanly _ _ 

7,506 

Gaston _  ...  .. 

10,929 

Tyrrell. 

2,386 

Gates _  _ _ 

5,538 

Union.. 

24,118 

Granville.. .  : _ _ 

1,774 

V  ance. 

3,757 

Greene _  .. 

9,073 

Wake... 

28,606 

Guilford  _.  _ 

186 

Warren.. 

13,846 

Halifax. . . 

27,615 

Washington 

3,953 

Harnett . 

28,303 

Wayne _ 

24,895 

Hertford . . 

9,560 

Wilson. 

24,819 

Hoke 

15,713 

Hyde _ 

3,532 

State  total 

852,356 

Iredell . 

18,546 

30 


Comparative  Prices  Tobacco  Crop  in  Four  States 
Per  100  Pounds  on  Auction  Floors 


Year 

North 

Carolina 

South 

Carolina 

Virginia 

Georgia 

1910  _ 

$  10.60 

%  8.52 

$  9.00 

$. . 

1911  . . 

11.60 

12.18 

9.60 

1912  . 

16.00 

10.90 

12.00 

1913 

18.50 

13.76 

13.90 

1914  .  _ 

11.50 

9.83 

9.00 

1915 

11.20 

7.28 

9.40 

1916 

'  20.00 

14.11 

14.90 

1917 

31.50 

24.09 

26.50 

1918.-.. . - _ 

35.10 

31.06 

27.00 

31.50 

1919 _ 

53.60 

20.10 

47.40 

17.73 

1920 . 

21.28 

23 .80 

24 .00 

23.14 

1921 . __ . 

24 .57 

11.21 

20.50 

8.87 

1922* _ 

30.30 

23.00 

24 .00 

26.00 

♦Figures  for  1922  are  December  1st  prices. 


31 


Tobacco  Production  and  Average  Price  for  All 
United  States,  1880-1922 


Year 


1880- 

1890- 

1900- 

1901- 

1902- 

1903- 

1904- 

1905.. 

1906- 

1907- 

1908- 

1909- 

1910- 

1911- 

1912.. 

1913.. 

1914- 

1915- 

1916- 

1917- 

1918- 

1919.. 

1920- 

1921- 
1922* 


Pounds 


506,663,000 

457,881,000 

814,345,000 

818,953,000 

821,824,000 

815,972,000 

660,461,000 

633,034,000 

682,429,000 

698,126,000 

718,061,000 

1,055,133,000 

1,103,415,000 

905,109,000 

962,855,000 

953,734,000 

1,034,679,000 

1,062,237,000 

1,153,278,000 

1,249,276,000 

1,439,071,000 

1,465,481,000 

1,582,225,000 

1,075,418.000 

1,324,840,000 


Average 
Price  Per 
Hundred 


$  6.00 

6.90 
6.60 

7.10 
7.00 
6.80 

8.10 
8.50 

10 .00 
10.20 
10.30 
10.10 
9.30 
9.40 
10.80 
12.80 
9.80 
9.10 
14.70 
24.00 
28.00 
39.00 
21 .20 

19.90 
23.10 


•Figures  for  1922  are  preliminary  estimates. 


32 


Comparative  Production  Tobacco  Crop  in  Pounds 

by  States  from  U.  S.  Department  of  Agriculture 
Estimates 


Year 

North 

Carolina 

South 

Carolina 

Virginia 

Georgia 

1840 . .... 

16,772,000 

1850 _ 

11,984,000 

1860 _ 

32,853,000 

1870 _ 

11,150,000 

43,761  000 

1880 _ 

26,986,000 

78,421  000 

1890 _ 

36,375,000 

77,405  000 

1900 _ 

127,503,000 

105,543  000 

1910 _ 

120,000,000 

18,802,000 

149,760,000 

1911 _ 

99,400,000 

11,101,000 

128,000,000 

1912 _ 

110,980,000 

24,337,000 

112,200,000 

1913 _ 

167,500,000 

33,299,000 

154,000,000 

1914 _ 

172,250,000 

39,478,000 

113,750,000 

1915 _ 

198,400,000 

37,924,000 

144,375,000 

1916 _ 

176,000,000 

20,079,000 

129,200,000 

1917 _ 

249,033,000 

51,080,000 

129,500,000 

1918 _ 

306,105,000 

62,173,000 

165,550,000 

3,000,000 

1919 _ 

323,371,000 

81,156,000 

119,780,000 

10,327,000 

1920. . . 

431,531,000 

66,342,000 

179,580,000 

9,667,000 

1921 _ 

251,682,000 

43,533,000 

91,850,000 

5,039,000 

1922* _ 

306,940,000 

57,600,000 

156,750,000 

5,940,000 

•Figures  for  1922  are  preliminary  estimates  taken  from  Tobacco. 


33 


AMERICAN  TOBACCO  GROWERS 
COOPERATIVE  EXCHANGE 


James  C.  Stone,  President 
M.  O.  Wilson,  Secretary . 


Lexington,  Ky. 
...Raleigh,  N.  C. 


Members 

Burley  Tobacco  Growers  Cooperative  Association 
Lexington,  Ky. 


Tobacco  Growers  Cooperative  Association,  Raleigh 

N.  C. 


Canadian  Tobacco  Growers 
Kingston,  Ont.  (Canada). 


Cooperative  Association, 


Connecticut  Valley  Tobacco  Growers 


Association, 


Hartford,  Conn. 

Northern  Wisconsin  Tobacco  Growers  Cooperative 
Pool,  Madison,  Wis. 

Dark  Tobacco  Growers  Cooperative  Association, 
Hopkinsville,  Ky. 


34 


NATIONAL  COUNCIL  OF  FARMERS  COOPERA¬ 
TIVE  MARKETING  ASSOCIATIONS 

American  Cotton  Growers’  Exchange,  Arizona  Pima 
Cotton  Growers,  Texas  Farm  Bureau  Cotton  Associa¬ 
tion,  Oklahoma  Cotton  Growers  Association,  Arkansas 
Cotton  Growers  Cooperative  Association,  Alabama 
Farm  Bureau  Cotton  Association,  Georgia  Cotton 
Growers  Cooperative  Association,  South  Carolina  Cot¬ 
ton  Growers  Cooperative  Association,  [North  Carolina 
Cotton  Growers  Cooperative  Association,  American 
Tobacco  Growers  Exchange,  Burley  Tobacco  Growers 
Cooperative  Association,  Dark  Tobacco  Growers  Co¬ 
operative  Association,  Tobacco  Growers  Cooperative 
Association,  Connecticut  Valley  Tobacco  Growers  As¬ 
sociation,  Northern  Wisconsin  Tobacco  Growers  Co¬ 
operative  Pool,  Maryland  Wheat  Growers  Associated, 
Washington  Wheat  Growers  Association,  Idaho  Wheat 
Growers  Association,  Montana  Wheat  Growers  Asso¬ 
ciation,  Oregon  Cooperative  Grain  Growers,  Arizona 
Grain  Growers,  North  Dakota  Wheat  Growers  Asso¬ 
ciation. 

Texas  Wheat  Growers  Association,  Colorado  Wheat 
Growers  Association,  Nebraska  Wheat  Growers  Asso¬ 
ciation,  New  York  State  Sheep  Growers  Cooperative 
Association,  Texas  Farm  Bureau  Wool  Growers  Asso¬ 
ciation,  Pacific  Cooperative  Wool  Growers,  Pacific  Egg 
Producers,  Poultry  Producers  of  Central  California, 
Poultry  Producers  of  Southern  California,  Pacific 
Cooperative  Poultry  Producers,  Washington  Coopera¬ 
tive  Poultry  and  Egg  Producers,  Southwest  Georgia 
Watermelon  Growers  Association,  Texas  Watermelon 


35 


Growers  Association,  Florida  Watermelon  Growers 
Association,  Texas  Sweet  Potato  Growers  Exchange, 
Texas  Ribbon  Cane  Syrup  Association,  Texas  Alfalfa 
Growers  Association,  California  Peach  and  Fig  Grow¬ 
ers,  Arkansas  Rice  Growers  Cooperative  Association, 
National  Milk  Producers  Federation,  Maryland  State 
Dairyman’s  Association,  Dairyman’s  League  of  New 
York,  Maryland-Virginia  Milk  Producers’  Association, 
and  Peanut  Growers  Association  (Virginia  and  North 
Carolina) . 


1 


36 


COOPERATIVE  MARKETING 

By  Aaron  Sapiro  of  California 

From  an  address  to  tobacco  growers  made  at  Danville, 
Virginia,  May  14,  1921 

I  am  going  to  tell  you  the  story  of  tbe  raisin  busi¬ 
ness  in  California,  and  for  once  we  are  going  to  talk 
about  raisins  without  somebody  asking  bow  much 
yeast  does  it  take,  bow  long  does  it  bave  to  set,  etc. 
You  know  raisins  are  produced  in  one  section  of  Cali¬ 
fornia  ;  tbis  section  contains  something  less  than 
10,000  square  miles,  but  that  is  quite  a  big  section  of 
that  State,  and  it  so  happens  that  in  that  section  of- 
California  they  produce  these  tbin-skin  grapes  which 
authorities  say  are  the  best  raisins  in  the  world.  They 
found  that  out  in  1880,  and  they  started  these  great 
vineyards,  and  men  came  from  the  East  and  from 
the  Middle  West  and  from  all  over  the  country  to  buy 
vineyards  and  plant  raisins. 

By  1900  they  reached  the  point  where  there  was  an 
overproduction  of  raisins.  They  produced  about  40,000 
to  50,000  tons  of  raisins  and  the  consumption  was  only 
about  30,000  tons.  There  were  only  about  ten  firms  to 
whom  the  growers  could  sell  the  raisins.  Some  of  the 
raisins  come  without  seed  and  some  come  with  seed 
and  are  seeded ;  others  come  in  clusters  and  they  have 
;o  be  spread  out  and  dried  and  processed,  and  then 
>ut  up  in  large  boxes  or  cartons  before  they  can  go  to 
;he  consumer.  There  were  ten  packing  plants.  Five 
vere  great  big  ones,  called  the  “High  Five,”  and  five 
vere  owned  by  smaller  firms,  called  the  “Low  Five”; 
ind  in  California  if  you  didn’t  sell  your  raisins  to  the 


37 


High  Five  or  the  Low  Five  you  were  stuck  with 
raisins  and  you  had  to  feed  them  to  the  hogs. 

About  1900  they  started  in  with  this  overproduction 
and  the  consumers  who  could  not  sell  their  raisins  to 
the  High  Five  or  the  Low  Five  had  to  keep  them  and 
feed  them  to  the  hogs.  There  was  nothing  else  they 
could  do  with  them.  From  1900  to  1912  the  growers 
of  California  who  produced  raisins  were  in  just  about 
the  same  situation  that  you  men  are — they '  had  no 
real  form  of  organization ;  they  were  just  absolutely 
at  the  mercy  of  the  buyers.  Between  the  years  1900 
and  1912  there  was  never  a  crop  of  raisins  that  pro¬ 
duced  a  profit  to  growers  of  raisins  as  a  whole  in  the 
State  of  California.  Between  those  12  years  was  the 
dark  period  of  the  raisin  industry  in  that  State.  A 
buyer  would  call  on  a  grower  about  February,  and 
nobody  on  earth  in  February  can  tell  what  the  crop  of 
raisins  is  likely  to  be.  He  would  say,  “Now  John,  I 
have  been  up  and  down  the  State,  and  I  want  to  tell 
you  we  are  going  to  have  a  whale  of  a  crop  in  Cali¬ 
fornia  this  year.”  John  would  say :  “How  does  that 
interest  me?”  He  would  say :  “The  consumption  is 
only  about  30,000  tons  of  raisins,  and  it  looks  like  we 
are  going  to  have  a  crop  of  50,000  or  60,000  tons  of 
raisins.  Our  firm  is  going  to  buy  only  about  3,000  tons 
of  raisins,  and  when  we  buy  our  3,000  tons  we  are  not 
going  to  buy  another  pound.” 

In  those  years  there  was  a  very  peculiar  coincidence. 
No  more  than  one  buyer  would  ever  call  on  any  one 
grower.  Two  buyers  never  went  to  one  grower  in  any 
one  of  those  sections,  so  a  fellow  knew  if  he  did  not 
make  a  bargain  with  that  buyer  he  would  be  gone  and 
he  wouldn’t  sell  his  raisins.  The  buyer  would  come 
back  in  March  and  say,  “John,  I  have  been  down 


38 


through  the  State,  to  all  the  different  towns,  and 
everywhere  I  go  the  signs  are  the  same,  and  you  can 
see  it  is  going  to  be  a  huge  crop.  That  means  that  half 
the  growers  are  going  to  feed  their  raisins  to  the  hogs. 
You  have  got  to  be  thinking  about  selling  your  raisins. 
We  are  going  to  put  you  on  our  list  and  we  will  buy 
your  raisins.”  John  says,  “I  will  talk  about  selling 
when  you  can  talk  a  good  price  to  me.”  So  the  buyer 
goes  away  and  John  would  lean  over  the  fence  and 
say  to  his  neighbor,  “Bill,  what  have  you  been  hearing 
about  the  crop?”  And  Bill  would  say:  “A  buyer  was 
down  to  see  me  and  he  said  we  would  have  a  crop  of 
about  50,000  tons,  and  there  would  be  a  big  overpro¬ 
duction,  and  that  if  I  didn’t  sell  to  him  I  would  feed 
my  raisins  to  the  hogs.”  And  John  would  say,  “That 
|  is  the  very  thing  the  buyer  told  me.” 

Strangely  enough  Bill  and  John  would  have  heard 
exactly  the  same  story  from  different  buyers.  Of 
course,  men,  I  do  not  say  that  the  buyers  got  together, 
but  it  is  very  queer  how  often  they  would  agree  on 
;  figures. 

About  a  week  later  the  buyer  would  come  back  to 
John  and  say,  “John,  we  are  ready  to  make  a  contract 
for  raisins.”  John  says,  “We  will  see  about  it — what 
will  you  pay  me?”  The  buyer  says,  “A  cent  a  pound.” 
John  would  say,  “Ye  gods,  they  have  been  telling  us 
from  the  University  that  it  costs  from  2 y2  to  3c  a 
pound  to  produce  these  raisins.  I  cannot  sell  for 
that ;  I  owe  more  than  I  can  possibly  pay  as  it  is ; 
I  cannot  take  that  price.”  The  buyer  would  say,  “I 
tell  you  we  have  got  to  buy  our  raisins  at  exactly  the 
same  price  as  our  competitors ;  we  cannot  pay  you 
any  more.  I  will  be  back  to  see  you  again  in  about  a 
week  and  wTe  will  see  if  you  are  ready  to  sign.  In  the 

39 


meantime  you  talk  it  over  with  your  wife  and  your 
neighbor  and  your  banker  and  see  what  you  can  do.” 
So  John  would  talk  it  over  with  his  wife,  and  John's 
wife  would  say,  “I  do  not  know  anything  about  the 
price,  but  we  have  got  to  get  things  for  the  house  and 
we  need  things  for  the  children,  and  a  cent  a  pound  is 
better  than  nothing.”  And  John  would  say,  “Let  me 
talk  it  over  with  Bill.”  So  he  would  go  and  lean  over 
the  fence  again  and  say :  “Bill,  what  have  you  been 
offered  for  your  raisins ;  I  am  offered  a  cent  a  pound 
for  mine.”  Bill  would  say,  “Well,  that  is  funny ;  I  am 
offered  a  cent  a  pound  by  the  other  buyer.”  So  then 
John  would  go  and  talk  it  over  with  his  banker,  and 
the  banker  would  say :  “Now  listen,  John,  a  cent  a 
pound  is  a  pretty  rotten  price  for  raisins,  hut  I  can¬ 
not  tell  you  not  to  sell ;  and  I  can’t  advise  you  to  sell 
at  that  price.  I  know  you  owe  some  money  at  this 
bank ;  I  know  you  have  got  to  pay  some  interest.  That 
is  not  my  money  that  you  owe,  it  belongs  to  my  de¬ 
positors.  All  I  want  to  tell  you  is  that  fall  is  coming 
around  and  the  interest  is  due  and  I  have  got  to  have 
that  interest;  but  of  course  I  am  not  going  to  advise 
you  to  sell  your  raisins  at  a  cent  a  pound — you  have 
to  make  the  decision.”  So  he  would  go  back  to  his 
home  feeling  pretty  worried. 

The  buyer  would  come  hack  the  next  week  and  say : 
“You  have  either  got  to  sign  today  or  I  cross  you  off 
the  list  and  will  get  my  3,000  tons  of  raisins  from  the 
other  fellows.”  And  John  would  say,  “I  cannot  sell 
at  that  price.”  The  buyer  would  say,  “Well,  John,  you 
have  always  handled  your  raisins  in  good  condition. 
If  you  give  me  your  word  of  honor  that  you  will  not 
say  a  word  of  this  to  Bill  or  any  other  grower,  I  will 
make  the  price  to  you  1  %  c  a  pound.”  And  John 


40 


would  break  a  leg  to  get  to  that  contract  and  sign  it 

and  the  buyer  would  go  off  with  John’s  contract  for  a 
cent  and  a  quarter  a  pound. 

!  That  trick  was  played  all  over  California  because 
the  buyer  understands  the  grower’s  psychology.  All 
the  grower  is  interested  in  its  getting  a  little  better 
price  than  his  neighbor.  The  buyer  plays  up  to  John’s 

!  psychology  and  makes  him  feel  that  he  is  smarter 
than  Bill. 

We  have  eliminated  that  in  California  now.  Our 
growers  sell  on  terms  of  fair  prices  for  all  and  not  a 
•  little  better,  secret  price  than  his  neighbor. 

But  that  is  how  they  worked  the  raisin  game  in 
California.  Half  of  the  crop  used  to  be  bought  under 
|  ^iese  secret  contracts,  made  under  your  word  of 
honor  not  to  tell  anybody.  And  so  John  would  sell  his 
ci o^  August  would  come  and  the  grapes  would  show. 
September  would  come  and  the  grapes  would  be  har¬ 
vested.  Usually  there  would  be  a  crop  of  about  32,000' 
tons.  The  packers  paid  about  iy2c  a  pound  for  the 
raisins;  the  packers  would  sell  them  from  6c  to  8c  a 
I  pound ;  the  public  would  pay  up  to  18c  a  pound.  The 
I  growers  got  8  pennies  out  of  every  dollar  that  the  con¬ 
sumer  paid  for  the  raisins,  and  there  was  only  a 
half -cent  expense  in  packing,  etc.,  between  the  grower 
and  the  consumer.  Under  the  present  plan  of  co¬ 
operative  marketing  the  growers  get  48c  out  of  every 
jdollar  paid  by  the  consumer.  That  is  why  in  Cali¬ 
fornia,  fiom  1900  to  1912  every  crop  of  raisins  pro¬ 
duced  a  big  profit  for  the  packers,  and  every  crop  of 
raisins  left  the  grower  poorer  than  he  was  when  the 
year  started. 

You  can  take  any  one  of  the  years  between  1900  and 
1912,  and  you  can  take  any  one  of  the  counties  in 


41 


which  raisins  were  produced,  and  there  were  more 
mortgages  foreclosed  in  any  one  of  those  counties  be¬ 
tween  1900  and  1912  than  in  all  the  years  in  all  the 
raisin-producing  counties  of  California  from  1912  to 
1921.  The  great  change  came  in  1912.  The  growers 
woke  up,  fully  determined  they  were  not  going  to  be 
exploited  in  future  years.  They  determined  they  were 
going  to  get  more  of  the  consumer’s  dollar  without 
raising  the  price  a  cent  on  the  consumer ;  they  de¬ 
termined  they  were  going  to  handle  their  business  like 
business  men  and  not  like  a  lot  of  disorganized  babies. 
They  took  up  COOPERATIVE  MARKETING. 

At  the  end  of  1912  they  had  a  terrific  crop.  Prices 
on  raisins  went  down  immediately — in  some  cases  as 
low  as  a  half-cent  a  pound  to  the  growers,  and  over 
half  of  the  crop  was  left  in  the  growers’  hands  and 
they  wTere  simply  broke.  Some  of  the  big  men  figured 
it  out  that  by  1914  they  wrould  be  absolutely  cleaned 
out ;  that  they  might  as  well  stop  right  now,  sell  their 
vineyards  for  what  they  could  get,  get  out  of  the  line 
and  go  to  some  other  way  of  making  their  living. 

So  they  went  into  town  and  began  to  talk  to  their 
bankers  and  their  merchants ;  they  began  to  hold  little 
conferences  in  every  little  town  around  central  Cali¬ 
fornia  on  the  raisin  industry ;  and  the  most  famous 
meeting  they  had  in  Fresno.  There  was  a  big  meeting 
in  Fresno  between  the  growers,  bankers  and  mer¬ 
chants. 

The  leading  banker  got  up  and  said,  “You  men  simply 
hate  me  because  the  only  time  you  ever  see  me  is  when 
you  borrow  money  to  loan  on  your  vineyards ;  and 
the  next  time  you  see  me  is  when  you  come  in  to  tell 
me  you  cannot  pay  the  interest  on  that  mortgage ;  and 
the  next  time  you  see  me  is  when  you  come  to  borrow 


42 


more  money  for  the  next  year’s  crop.  The  next  time 
you  see  me  is  when  you  say  you  cannot  pay  the  interest 
on  eithei  loan ;  and  the  next  time  you  see  me  is  when 
I  tell  you  I  have  to  foreclose.  So  you  hate  me  because 
you  think  I  am  the  man  to  make  money  out  of  your 
losses  and  misfortune,  and  do  not  help  you  to  make 
any  prosperity.  I  don’t  want  you  to  think  of  me  in 
that  way  as  your  enemy ;  I  want  you  to  be  my  friend. 
I  would  rather  that  you  make  than  lose  money.  Profits 
are  money  to  you,  you  pay  your  profits  to  the  mer¬ 
chant  and  the  merchants  deposit  the  profits  with  the 
banks.  I,  as  a  banker,  know  that  I  cannot  be  a  suc¬ 
cessful  banker  unless  all  you  growers  are  successful 
and  unless  the  merchants  are  successful ;  and  if  you 
growers  will  only  get  together  and  help  yourselves  I 
will  put  every  penny  in  the  world  I  have  behind  you, 
both  my  money  and  the  money  in  my  bank.” 

One  of  the  growers  said  he  pinched  himself  when  he 
heard  that —  there  was  a  banker  telling  them  he  would 
be  willing  to  put  up  all  of  his  personal  resources  be¬ 
hind  them  if  they  would  help  themselves. 

Suddenly  up  spoke  the  biggest  merchant  in  the 
town.  He  said :  “I  am  sick  of  you  fellows ;  when  I 
^ame  down  to  Fresno  I  expected  to  have  a  great  big, 
ine,  high-class  store ;  I  expected  to  carry  fine  stocks 
ind  I  wanted  to  have  a  good  store.  I  wanted  to  have 
■  i  store  of  which  you  and  I  could  be  proud.  But  as  it 
s  now  you  fellows  are  not  making  any  money ;  you  are 
I  lot  making  a  living;  you  don’t  buy  anything  from  me 
a  except  overalls ;  you  don’t  buy  anything  for  your  wife 
except  Mother  Hubbards ;  you  don’t  buy  any  furniture 
sxcept  the  cheapest ;  you  don’t  buy  any  kitchen  uten- 
3  ils  except  tinware.  The  only  way  I  have  made  money 
if  n  the  last  few  years  is  by  buying  up  mortgages  on 


43 


your  vineyards,  and  then  I  foreclose  on  your  vineyards 
and  sell  your  vineyards,  and  I  make  a  little  money 
that  way.  But  I  don’t  like  to  make  money  that  way ; 
I  want  to  make  money  as  a  merchant.  If  you  men 
make  money  I  can  get  some  of  your  profits  and  I  can 
put  in  fine,  high-class  stuff  in  my  store  which  you  can 
afford  to  buy  and  I  can  make  decent  profits.  You  fel¬ 
lows  have  to  make  profits  for  yourself  so  as  to  enable 
me  to  be  a  real  merchant,  and  I’ve  got  to  be  a  real 
merchant  to  help  the  bank  make  profits.  If  you  fel¬ 
lows  will  organize,  get  together,  and  do  something  for 
yourself,  I  will  put  every  penny  I  have  in  the  world 
behind  you.” 

Then  came  the  third  big  shock  to  the  growers. 
Fresno  has  a  real  newspaper — The  Fresno  Republican, 
and  they  were  not  making  money,  and  the  editor  of 
that  paper  said :  “I  have  my  kick  against  these  grow¬ 
ers.  Why,  we  have  the  best  paper  in  California  and 
we  can’t  make  any  money  on  it  because  you  don’t 
make  enough  money  out  of  your  raisins  to  be  a  sub¬ 
scriber,  and  the  merchants  won’t  advertise  in  the 
paper  because  they  say  you  fellows  don’t  take  the 
paper,  and  you  don’t  buy  anything ;  so  I  can’t  make 
any  money  on  advertisements,  and  I  can’t  make  any 
money  on  your  subscriptions  because  you  fellows  are 
not  making  any  money.  If  you  will  get  together  and 
do  something  to  help  yourself  we  will  put  the  columns 
of  our  paper  behind  you  absolutely,  and  every  penny 
that  our  paper  has  and  every  penny  that  our  proprietor 
has,  we  will  put  behind  you  to  help  you  help  your¬ 
selves.” 

One  of  the  big  growers  got  up  and  said :  “The  bank¬ 
ers  are  with  us,  the  merchants  are  with  us,  the  editors 
are  with  us ;  they  all  realize  that  unless  the  growers. 


44 


as  a  whole  are  making  money  the  community  is  not 
piosperous,  and  now  let  the  growers  help  themselves  ” 
And  this  big  fellow  said :  “I  wanted  to  sell  my  vine¬ 
yard,  and  I  went  down  to  the  real  estate  firm  to  see 
about  selling  my  place.  They  said,  ‘What  price  do 
you  put  on  your  vineyard?’  I  said,  ‘$90  to  $100  an 
acre.’  He  said,  ‘What  will  it  cost  to  tear  out  your 
vines?’  I  said,  ‘$50  to  $75  an  acre.’  They  told  me 
my  vineyard  was  worth  more  with  the  vines  out  than 
with  the  vines  in.”  Another  man  got  up  and  said, 
All  of  our  investments  in  these  vineyards  are  going  to 

the  dogs ;  let  s  all  get  out  of  it  at  once  and  go  in  some 
other  line.” 

Men  .started  up  all  over  the  house  and  said,  “We 
ought  to  organize.”  And  they  said,  “How?”  And 
somebody  answered  and  said,  “The  orange  and  almond 
and  walnut  growers  have  organized  and  they  have 
been  successful.  All  over  Europe  the  growers  have 
been  organized  for  years— Scandinavia  and  Italy  and 
even  paits  of  Russia,  and  you  will  find  all  the  growers 
organized  on  all  kinds  of  products.”  One  of  the 
growers  said,  “Do  you  think  that  we,  the  American 
farmers,  who  are  supposed  to  be  the  most  intelligent 
people  in  the  world,  are  backward  in  these  things?” 
And  one  fellow  popped  up  and  said,  “Yes,  the  Ameri¬ 
can  farmer  is  30  years  behind  in  cooperative  market¬ 
ing.  My  opinion  is  if  they  can  do  it  in  Europe  or  any 
other  place  in  the  world,  we  can  do  it  right  here,  and 
do  it  with  raisins.” 

Some  of  the  growers  got  up  with  the  usual  stuff  that 
you  hear — “oranges  are  different  from  raisins,  and 
walnuts  are  different  from  raisins,  and  almonds  are 
different  from  raisins,  wheat  is  different  from  raisins, 
and  peas  are  different  from  raisins  and  flax  is  different 
from  raisins.” 


Of  course  they  are  all  different  from  raisins.  We 
all  know  that  the  fellow  who  is  telling  you  that  is  the 
fellow  who  is  trying  to  keep  you  disorganized,  because 
the  same  principles  which  have  made  successful  co¬ 
operative  marketing  of  other  products  apply  not  only 
to  raisins,  but  to  tobacco  and  cotton  and  wheat  and 
everything  else  in  the  world  that  men  produce. 

There  is  not  a  single  grower  problem  which  you 
cannot  solve  a  whole  lot  better  if  you  get  together 
than  you  can  solve  when  you  are  standing  apart. 

At  this  meeting  in  Fresno  the  growers  said  the  ques¬ 
tion  is  to  get  together.  Now  here  is  the  method  we 
adopted ;  it  was  well  suited  to  their  conditions  at  that 
time.  They  decided  to  form  a  great  big  corporation 
with  a  million  dollars  behind  it,  because  they  were 
going  to  put  up  a  great  big  packing  plant  to  take  the 
place  of  the  “High  Five”  and  the  “Low  Five.”  You 
have  all  these  fine,  big  warehouses,  which  perform  the 
function  of  receiving,  separating,  and  grading  tobacco. 
There  is  no  need  for  the  tobacco  growers  to  start  to 
put  up  warehouses  and  factories  to  do  it,  and  we  must 
respect  their  invested  capital  just  as  much  as  we 
want  them  to  respect  the  capital  we  have  invested  in 
the  growing  line.  So  I  am  not  suggesting  the  same 
plan  for  tobacco.  I  am  suggesting  for  tobacco  a  plan 
that  suits  tobacco,  just  as  the  plan  originally  wdrked 
for  raisins  suited  raisins. 

So  they  agreed  out  there  in  Fresno  to  put  up  about 
a  million  dollars  to  put  up  raisin  packing  plants,  and 
they  got  the  growers  to  tie  up  with  the  organization 
for  five  years.  We  found  growers  associations  that 
just  simply  rotted  away  because  the  growers  were  tied 
up  for  only  one  year,  or  because  they  were  tied  up  on 
a  little  weak  contract — we  found  that  all  over  the 


46 


State.  We  have  had  more  failures  than  we. had  suc¬ 
cesses  before  1912.  Since  1912  we  have  learned  how 
to  do  it.  These  raisin  growers  said  we  will  not  start 
unless  we  start  right,  with  a  big  five-year  contract  and 
a  tight  five-year  contract,  in  which  every  grower  who 
signs  it  agrees  to  deliver  over  all  the  raisins  he  pro¬ 
duces  to  the  association,  and  then  gives  the  association 
the  right  to  grade  them  into  clusters  and  into  the 
seedless  raisins,  and  then  sell  the  raisins  and  give  to 
every  grower  the  same  as  every  other  grower  for  the 
same  quality  and  quantity  of  raisins. 

Some  of  the  growers  said :  “You  can’t  grade  raisins 
because  one  man’s  raisins  are  different  from  another 
man’s  raisins.”  Now,  you  fellows  have  heard  that 
same  thing  about  tobacco,  haven’t  you?  Now  that  is 
the  pet  argument  of  the  speculator,  that  nobody  can 
grade  the  stuff.  We  all  answer  back,  “What  did  you 
tell  your  buyers  to  do  when  they  go  out  to  buy  raisins? 
How  do  they  grade  them?”  They  said,  “Well,  these 
buyers  know  how  to  do  it.”  We  said,  “How  many?” 
They  said,  “We  suppose  we  have  50  or  60  men  to 
grade  raisins  for  us,  and  you  cannot  grade  raisins.” 
We  said,  “If  you  are  able  to  grade  raisins  we  are  able 
to  hire  men  to  grade  for  us  instead  of  to  grade 
,  against  us” 

There  has  never  been  a  thing  which  we  organized 
to  do  which  we  have  not  succeeded  in  doing,  and  we 
succeeded  absolutely  in  grading  and  classing  raisins. 
Remember,  whatever  the  speculator  does,  you  can  do. 
Here  is  the  test.  Suppose  these  fellows  who  buy 
tobacco — let  us  take  the  Reynolds  Company,  or  any¬ 
body  else — sends  out  a  bunch  of  buyers.  They  give 
these  buyers  instructions ;  they  tell  them  what  to  buy, 
what  type  to  get,  the  kind  of  leaves  they  should  buy. 


47 


They  give  these  men  absolute  grading  instructions, 
and  these  buyers  go  out  by  the  hundreds,  as  you  well 
know.  You  are  supporting  a  few  hundred  buyers  off 
of  your  tobacco.  They  grade  tobacco  by  what  we  call 
“buyer’s  grades.”  If  they  can  do  it — it  does  not  take 
a  genius  to  do  it,  because  there  are  not  200  geniuses 
in  the  whole  country  at  any  one  time — if  they  can 
grade,  we  can  grade ;  we  will  get  experts  to  do  it  for 
us  and  not  against  us.  You  know  the  stockholders 
of  Reynolds  do  not  grade  tobacco ;  they  don’t  have  to 
know  anything  about  grading  tobacco ;  they  hire  sal¬ 
aried  buyers  to  get  tobacco  and  grade  it.  They  cannot 
do  anything  with  the  tobacco  that  you  can  t  do  your¬ 
self. 

So  this  grading  business  we  just  swept  aside,  and 
the  raisin  growers  decided  they  could  grade  and  they 
put  the  grading  provision  in  the  contract. 

Every  contract  was  conditioned  upon  their  signing 
up  75  per  cent  of  all  the  raisin  acreage  of  California. 
Some  of  the  fellows  said,  “Why  do  we  want  75  per 
cent?”  And  we  said,  “We  have  either  got  to  get  the 
growers  with  us  as  a  class  or  we  might  as  well  quit 
right  now.” 

So  they  all  agreed  to  sign  up  this  five-year  contract 
for  75  per  cent  of  the  crop,  under  which  they  pooled 
their  product,  graded  it,  and  sold  it,  and  everybody 
would  get  the  same  price  as  anybody  else  for  the  same 
quality,  grade,  and  quantity  of  raisins. 

Well,  how  do  they  get  the  sign-ups?  You  know  a 
lot  of  merchants  and  bankers  have  already  realized 
that  this  is  not  the  growers  problem  alone;  it  is  the 
problem  of  the  whole  community.  We  realized  that 
point  in  1912  in  California.  So  they  all  worked  to¬ 
gether;  the  towns  closed  up  their  stores,  the  banks 

48 


the  Sfch00ls  cIosed>  and  they  would  form  grow- 
.  ‘nan'-5— t«To  growers  and  a  merchant,  two  growers 

tW°  gl'°WerS  and  a  ***».  two 
,,  '  1  a  banker,  two  growers  and  a  lawyer  and 

they  would  go  out  in  these  teams  of  three  to  everv 
smgle  raisin  district  in  the  J 

beeu  put  over.  not  by  the  growers,  but  by  the 
gi  on  ers  and  the  community  leaders  combined  because 
our  leaders  have  decided  that  if  there  is  any’  agricut 
tural  interest  that  keeps  four  out  of  five  of  the  grow- 
poor  that  it  is  a  rotten  interest,  and  it  is  rotten 

thirttf,  COmmunity;  and  they  figure  that  the  only 
-  at  is  good  for  the  community  is  a  thing  that 
makes  a  profit  for  at  least  four  out  of  five  growers 
So  our  community  leaders  have  devoted  themselves 
to  making  the  growers  see  the  need  and  advantage  of 
cooperative  marketing. 

So  they  would  send  these  teams  out.  The  teams 
went  to  every  town  in  the  whole  raisin  district  It 
became  almost  as  holy  to  these  people  as  a  religious 
movement.  You  talk  to  a  Californian  today  about 
cooperative  marketing  and  see  what  he  thinks  about 
it  The  movement  has  transformed  all  of  our  dis¬ 
tricts  from  absolute  despair  to  permanent  prosperitv— 
even  during  this  year. 


They  went  all  through  the  raisin  districts  in  Cali¬ 
fornia.  In  six  months  they  had  signed  up  78  per  cent 
of  the  entire  raisin  acreage  of  that  State.  Not  only 
had  they  done  that,  but  they  had  their  million  dollars. 

Now  how  did  they  get  the  million  dollars?  The 
bankers  and  merchants  put  up  $300,000.  The  growers 
did  not  have  any  cash,  and  they  put  up  $700,000  in 
notes,  and  the  banks  took  up  these  notes  and  let  the 
farmers  have  face  value  on  the  notes. 


49 


Suddenly  came  that  awful  crop  of  1912,  which  was 
a  70,000  ton  crop.  In  addition,  there  were  20,000  tons 
of  raisins  on  hand  from  the  previous  year ;  and  there 
the  association  was  organized  and  came  into  a  thing 
like  that  the  first  jump.  All  the  trustees  and  the 
directors  were  raisin  growers ;  they  had  to  be.  You 
know  the  great  safety  of  a  California  association  is 
that  the  directors  have  all  their  raisins  in  the  same 
pools  as  the  smallest  fellow.  If  they  want  to  make 
a  profit  for  their  own  raisins  they  have  to  make  a 
profit  for  everybody  else.  If  they  want  to  make  a 
charge  on  anybody  else’s  raisins  they  have  to  put  a 
charge  on  their  own  raisins.  Now  the  directors  and 
the  trustees  were  chosen  by  the  members,  and  the 
directors  were  these  big  raisin  growers,  and  these 
directors  met  at  Fresno,  and  they  sat  around  a  table 
and  they  looked  at  each  other  and  they  said,  “We 
might  as  well  not  fool  ourselves.  We  know  we  are 
all  fine  farmers,  that  we  produce  fine  raisins,  but  we 
all  know  that  we  don’t  know  a  blame  thing  about 
selling  raisins.”  They  said,  “Well,  now,  that  is  inter¬ 
esting,  and  that  is  frank.” 

You  see,  we  know  about  this  business,  and  right 
here  I  want  to  tell  you  that  is  one  of  the  great  dis¬ 
coveries  of  the  California  farmers.  We  are  just  the 
same  type  of  fellows  as  you  are,  but  we  know  that 
no  farmer  in  the  world  knows  how  to  sell  his  crop. 
We  have  got  80,000  farmer  cooperators  in  California, 
just  as  energetic,  just  as  intelligent  as  you,  and  not 
one  of  them  tries  to  sell  his  own  stuff.  He  would  not 
try  to  sell  it  any  more  than  he  would  try  to  draw  up 
deeds  for  his  property.  So  he  hires  experts  to  sell 
his  stuff  for  him.  Eighty  thousand  farmers  in  Cali¬ 
fornia,  big,  prosperous  men,  have  hired  men  to  help 


50 


them  with  production,  and  they  hired  great  big  men 
to  help  them  on  marketing. 

So  these  directors  sat  around  that  table  and  they 
said,  TV  e  can  t  sell  this  crop,  let’s  hire  some  man  who 
can.  So  they  went  and  talked  to  their  bankers,  and 
the  bankers  gave  them  a  list  of  names  who  were  sup¬ 
posed  to  be  sharks  at  marketing  raisins.  They  got  the 
name  of  the  man  who  was  the  smartest  one  of  the  lot, 
James  Madison,  and  they  went  to  see  him.  They  told 
him,  “You  are  known  to  be  clean  and  you  are  known 
to  be  square,  and  we  know  you  are  fond  of  California, 
you  don  t  want  to  see  Fresno  and  all  these  towns  stay 
dead.  You  know  our  towns  are  jokes ;  we  have  to  put 
our  wives  and  children  in  the  field  and  keep  the  chil- 
dren  out  of  school  because  we  haven't  the  money  to 
|  hire  help.  We  want  you  to  help  us  sell  this  stuff  so 
we  can  take  our  wives  and  children  out  of  the  field 
and  keep  our  children  in  school,  where  they  belong.” 
James  Madison  says,  “Do  you  know  what  salary  I 
make  a  year?”  They  said,  “Yes,  we  know  you  make 
a  big  one.  We  will  give  you  a  fair  salary  and  we 
want  you  to  represent  us  for  the  sake  of  California.” 
He  said,  “Well,  I  will  go  with  you,  no  matter  what 
you  pay,  but  I  want  you  to  treat  me  square.”  They 
said,  “What  do  you  think  we  ought  to  pay  you  as  a 
start  in  salary?”  He  said,  “$17,500  a  year,  plus  a 
bonus.”  The  salary,  plus  the  bonus  which  they  paid 
Madison,  amounted  to  $25,000  a  year.  The  best  in¬ 
vestment  that  the  California  farmer  ever  made  was 
James  Madison  at  $25,000  a  year.  Don’t  you  ever 
dare  ask  for  a  fair  price  for  tobacco  and  deny  a  fair 
price  for  brains.  You  have  got  enough  tobacco  in  the 
world,  but  you  haven’t  got  enough  brains  on  the  farm¬ 
ers’  side  in  the  tobacco  industry.  You  have  got  to  get 


51 


them  on  the  same  terms  that  the  California  farmer 
did.  We  always  feel  that  the  most  important  business 
in  California  is  agriculture.  It  is  not  the  Standard 
Oil  Company,  it  is  not  the  railroads,  it  is  AGRICUL¬ 
TURE. 

Now  the  Standard  Oil  Company  and  all  those  fel¬ 
lows  have  high-class,  efficient  men,  so  do  the  growers 
in  California.  We  pay  our  managers  anywhere  from 
$10,000  to  $36,000  a  year ;  we  get  the  best  men  in  the 
country  to  do  our  work  for  us.  We  need  the  best 
brains  in  the  country,  and  they  serve  the  growers 
instead  of  exploiting  them.  Those  men  are  in  the 
industry  right  now,  but  they  are  on  the  other  side  of 
the  fence.  The  other  fellows  pay  them  to  exploit  the 
growers ;  we  pay  them  to  serve  the  growers. 

Now  you  growers  want  to  determine  that  once  for 
all.  If  you  are  going  to  apply  this  to  the  tobacco 
business  you  are  going  to  build  up  the  biggest  business 
in  the  United  States.  If  you  are  going  to  handle  it 
like  a  business,  you  have  got  to  go  into  the  world  of 
brains  and  compete  for  brains,  compete  for  ability. 
You  have  got  to  hire  big  men  for  marketing  and  big 
men  for  grading,  big  men  for  transportation  experts, 
big  men  at  every  point  of  the  game. 

We  not  only  hired  Madison,  but  Madison  came  and 
studied  the  situation,  and  said,  “We  have  got  to  have 
transportation  experts,  warehouse  experts,  packing 
experts.”  The  growers  said  they  would  get  them. 
Then  Madison  said,  “This  is  a  funny  business ;  we 
have  this  fine  crop  and  yet  we  cannot  make  anything  i 
for  a  year.  I  am  going  to  hire  a  sales  analyst  and  { 
put  him  on  the  job  and  find  out  why  we  can’t  sell  s 
raisins,  but  he  will  cost  a  lot  of  money.”  So  he  called  r 
in  a  sales  analyst  and  said  to  him,  “Your  job  is  to  s 


52 


answer  one  question-Wkat  is  wrong  with  the  raisin 

hnt'if  ^ Sald’  "That  is  a  Pretty  Pig  question, 
Put  if  you  will  give  me  a  few  months  to  study  it  I  will 
answer  it  for  you.” 


So  this  fellow  went  East.  He  went  to  every  whole¬ 
saler  who  handles  raisins;  he  went  to  all  the  retailers 
who  handled  raisins.  He  said  to  the  wholesalers, 
When  do  you  want  raisins  delivered?”  And  they 
said  October  and  November  of  every  year.  He  went 
to  the  retailers  and  asked  them  when  they  wanted 
raisins  delivered,  and  they  said  November  and  Decem¬ 
ber  of  every  year,  that  they  sold  90  per  cent  of  the 
raisins  in  these  months  and  only  10  per  cent  the  rest 
of  the  year.  He  found  that  was  the  story  in  almost 
every  town  in  the  United  States.  He  came  back  and 
said,  “I  have  found  the  trouble  with  the  raisin  indus¬ 
try,”  and  he  showed  a  chart  showing  the  delivery 
.dates  and  the  sales  date  of  raisins.  He  said,  “The 
American  people  think  that  raisins  are  made  to  eat 
only  three  times  a  year— Thanksgiving,  Christmas, 
and  New  Year.  You  have  got  to  teach  the  American 
people  that  raisins  are  as  good  in  June  as  they  are  in 
November.”  He  said  they  had  to  do  two  things:  first, 
get  a  brand  for  the  raisins  and  then  put  on  a  good 
system  of  inspection ;  the  second  thing  was  to  put  on 
a  big  advertising  campaign  in  the  United  States, 
through  magazines,  newspapers  and  billboards,  that 
California  raisins  are  good  to  eat  all  the  time  for 
every  purpose.  Whatever  it  costs,  this  was  the  only 
thing  that  would  save  the  industry.  They  told  him  to 
go  ahead  and  spend  whatever  was  necessary.  They 
spent  a  few  hundred  thousand  dollars  on  advertising 
raisins,  and  the  first  year  they  were  organized  they 
sold  that  entire  70,000  tons  of  raisins  that  they  had  to 


53 


sell,  plus  the  20,000  tons  carried  over  from  the  pre¬ 
vious  year,  and  the  price  to  the  grower  ranged  from 
314  cents  to  31/2  cents  a  pound.  In  one  year  those 
raisin  growers  took  that  dead  industry  and  thej  abso¬ 
lutely  put  it  on  its  feet,  so  that  the  growers  of  Cali¬ 
fornia  made  a  real  and  substantial  profit  on  raisins 
from  the  crop  of  1912,  and  since  that  date  there  has 
never  been  a  crop  of  raisins  on  which  the  growers  of 
California  have  not  made  a  real  and  substantial  profit 
— not  merely  an  income,  but  a  real  profit. 

Now  those  fellows  were  pleased  at  this,  it  happened 
so  quick,  so  they  started  in  to  plant  more  vineyards, 
and  by  1915  the  normal  crop  in  California  was  about 
100,000  tons  a  year.  They  were  afraid  the  people  of 
the  country  would  not  eat  that  much,  so  they  called 
in  the  sales  expert  again.  He  said,  “We  will  have  to 
get  the  people  who  are  eating  raisins  to  eat  more 
raisins,  or  we  will  have  to  get  people  who  are  not 
eating  raisins  to  eat  raisins.”  He  said,  “I  do  not 
think  we  can  get  people  who  are  already  eating  raisins 
now  to  eat  more  raisins,  because  we  have  saturated 
the  field  with  raisins.”  He  meant  the  use  of  raisins 
as  a  food. 

So  he  went  around  and  saw  all  the  ladies  he  could 
in  Fresno.  He  said,  “How  do  you  use  raisins?”  They 
said,  “Sometimes  we  make  raisin  bread,  and  some¬ 
times  raisin  pie  and  raisin  cake.”  They  showed  him 
some  of  the  raisin  bread.  It  tasted  good,  and  he  went 
back  to  the  board  and  said,  “I  have  got  the  answer 
to  it— raisin  bread  and  raisin  pie  and  raisin  cake.” 
He  got  15  young  fellows  who  were  trained  salesmen 
and  called  in  a  baker,  and  the  baker  taught  those 
young  men  how  to  make  raisin  bread  and  raisin  pie 
and  raisin  cake  in  a  standardized  way.  He  then  took 


54 


those  15  young  fellows  all  over  the  United  States  to 
|  the  big  cities  and  the  big  hotels  and  bakeries,  and 
showed  them  how  to  make  raisin  pie  and  raisin  bread 
and  raisin  cake  according  to  a  standard  recipe.  They 
would  go  into  a  bakery  and  tell  the  baker  how  to  make 
raisin  bread,  and  tell  him,  “All  you  have  to  do  is  to 
put  in  a  quarter  of  a  cent’s  worth  of  raisins  in  the 
bread,  and  then  you  sell  it  for  six  cents  a  loaf  instead 
J  of  the  cents;  and  when  your  customers  come  in  you 
tell  them  the  children  like  bread  like  that  because  it 
has  raisins  in  it,  and  they  won’t  want  butter,  and  you 
wili  save  more  for  butter  than  you  spent  for  the 

laisins.  ’  (Of  course  that’s  hard  on  you  fellows  who 
sell  butter.) 

Then  the  bakers  all  over  the  country  began  to  make 
raisin  bread.  The  first  year  they  sold  a  fair  quantity 
to  the  baker  trade;  the  next  year  they  sold  G,0(X) 

I  tons ,  by  1910  they  sold  20,000  tons.  This  year  they 

are  selling  35,000  tons  to  the  baker  trade  in  this 
I  country. 

Now  that  is  merchandising.  I  have  told  you  those 
,  things  because  the  growers  are  the  people  who  can  do 
I  it  if  they  wfill  stand  together.  And  it  is  just  as  true 
for  tobacco  as  it  is  for  raisins. 

How  is  it  that  the  High  Five  and  the  Low  Five 
never  found  these  new  uses  and  this  great  demand 
for  raisins?  How  is  it  that  they  never  sent  men  over 
to  China  and  Japan  to  open  up  markets?  The  dealer 
never  exhausts  the  demand  for  any  commodity.  He 
never  has  to  buy  the  whole  tobacco  crop.  All  he  has 
to  do  is  to  buy  what  he  can  sell.  All  he  has  to  do  is 
to  sell  what  he  has  bought.  If  there  is  a  crop  of  one 
hundred  million  pounds  and  he  has  bought  only  fifty 
million  pounds,  all  he  has  to  sell  is  fifty  million 


55 


pounds,  and  lie  can  let  the  growers  carry  the  balance. 
The  grower  is  the  only  man  who  has  to  sell  the  whole 
crop.  The  grower  is  the  only  man  who  really  breaks 
his  neck  to  extend  demand,  and  that  is  absolutely  true. 

It  is  to  the  dealer’s  interest  that  the  supply  is 
always  greater  than  the  demand,  because  if  you  have 
the  supply  greater  than  the  demand  in  any  year,  he 
uses  that  as  an  excuse  for  breaking  the  price  of 
tobacco,  or  raisins,  or  prunes,  or  oranges,  or  cotton,  or 
wheat,  or  any  other  product  in  the  world,  year  after 
year.  It  is  to  the  dealer’s  advantage  to  have  an  over¬ 
production.  It  is  to  the  dealer’s  advantage  to  see 
that  the  world  does  not  absorb  that  overproduction. 
The  only  time  that  the  dealer  ever  comes  to  you  and 
asks  you  to  decrease  your  crop  is  when  the  dealer  is 
stocked  with  tobacco,  and  he  wants  you  to  pull  him 
out  of  the  hole. 

We  have  had  that  experience  with  industry  after 
industry  in  California.  It  is  only  the  growers  who, 
acting  as  a  whole,  have  learned  how  to  create  de¬ 
mands,  who  have  been  able  to  solve  their  problems. 
Our  orange  growers  increased  the  demand  for  Cali¬ 
fornia  oranges  300  per  cent  by  advertising.  With 
raisins  they  increased  the  consumption  in  this  coun¬ 
try  from  30,000  tons  a  year  to  160,000  tons  a  year 
from  1912  to  1918,  and  every  single  one  of  those  years 
was  at  a  higher  price  than  the  previous  year. 

The  growers  can  do  it  and  they  are  the  only  fellows 
in  the  world  who  can  do  it,  and  they  are  the  only 
people  in  the  world  who  have  the  whole  crop  to  sell 
and  who,  therefore,  must  do  it.  This  is  one  of  the 
great  things  we  learned.  In  1918  they  had  the  raisin 
industry  so  prosperous  that  Fresno  headed  the  list  of 
the  prosperous  cities  of  the  Union.  You  Virginians 


56 


used  to  think  you  had  great  cities  in  towns  like  Lynch¬ 
burg,  Richmond,  etc,  on  account  of  the  prosperous 
factories.  California  towns  head  the  list  now  in  pros¬ 
perity  ;  not  manufacturing  towns,  but  our  agricultural 
towns  head  the  list.  Look  up  and  see  what  town  is  at 
the  head  of  the  prosperous  towns  in  the  United  States 
— you  will  see  that  Fresno  is. 

Why  even  this  year,  when  the  majority  of  the 
growers  of  the  country  are  flat  broke,  9  out  of  10  of 
the  California  farmers  are  making  money  on  their 
products,  and  their  products  are  not  any  better  than 
your  products.  The  only  difference  between  Cali¬ 
fornia  and  Virginia  is  that  we  are  organized  in  Cali- 
fornm  and  you  are  disorganized  and  exploited  in 
Virginia.  You  can  rest  assured  your  crops  are  making 
money  for  some  one,  but  it  is  not  for  the  growers. 

I  Our  crops  in  California  are  making  money  for  lots  of 
j  people — for  the  growers,  for  the  merchants,  for  the 
bankers,  for  the  dealers — all  the  way  down  the  line ; 
but  the  growers  are  getting  their  share.  Where  the 
growers  of  California  used  to  get  8  per  cent  of  the 
consumer’s  dollar,  today  they  are  getting  48  per  cent 
of  the  consumer’s  dollar.  Where  the  growers  of  Cali¬ 
fornia  used  to  have  to  go  around  in  overalls,  dressed 
in  the  poorest  things,  with  no  carpets  on  their  floors, 
unpainted  houses,  with  their  children  working  in  the 
fields  and  not  in  the  schools,  today  the  standard  of 
living  among  the  California  farmers  is  equal  to  that 
of  the  city  man ;  his  home  is  attractive,  his  children 
are  in  school,  his  family  has  a  car,  and  he  has  money 
in  the  bank.  Today  2  per  cent  only  of  the  growers  of 
California  have  to  borrow  money  on  crop  mortgages. 
Today  2  per  cent,  where  in  your  state  over  60  per  cent 
of  your  growers  are  said  to  have  given  crop  mortgages. 


I  want  to  tell  you,  friends,  there  is  only  one  reason. 
Our  growers  have  learned  that  the  way  to  succeed  is 
to  start  in  and  help  themselves.  Nobody  will  do  it 
for  you.  As  long  as  you  stay  unorganized  they  will 
simply  do  it  to  you,  but  when  once  you  are  organized 
you  do  it  for  yourself.  Why  you  know  this  California 
business  is  not  a  mystery ;  it  is  an  absolutely  true 
system.  It  is  merchandising  a  product  instead  of 
dumping  a  product.  It  is  going  into  the  light  instead 
of  sitting  in  darkness.  Remember  you  are  never 
going  to  have  the  tobacco  industry  prosperous  until 
you  have  the  growers  organized,  working  through  the 
existing  warehouses,  working  through  the  existing 
factories,  on  a  real  business  system,  the  grower-  mak¬ 
ing  money,  the  warehouse  making  money,  and  the 
factory  making  money,  and  every  step  depending  on 
the  grower,  who  is  the  key  to  the  whole  industry. 
He  creates  wealth,  and  he  is  entitled  to  share  in  the 
products  of  that  wealth. 

In  California  we  never  organize  unless  we  know 
that  we  are  big  enough  to  hire  the  biggest  men  in  the 
country.  Three-fourths  of  all  the  growers  signed  up 
for  raisins;  three-fourths  for  prunes.  We  did  not 
start  up  our  egg  association  until  we  had  signed  up 
the  owners  of  a  million  hens.  From  that  point  on  we 
grew.  Several  of  our  associations  in  California  have 
92  per  cent  of  the  products  of  the  State — our  almond 
growers  and  our  raisin  growers.  Ninety-seven  per 
cent  of  all  the  berries  in  central  California  move 
through  an  organization. 

So  with  tobacco  you  will  organize  on  a  business 
basis;  you  are  not  going  into  existence  unless  you 
have  signed  up  50  per  cent  of  the  tobacco  raised  in 
these  three  states.  From  the  moment  you  start  you 


r 


will  be  the  dominant  factor  in  the  bright  tobacco 
markets  in  the  world. 

Then  we  organize  on  a  nonprofit  basis  and  a  co¬ 
operative  basis.  The  association  cannot  make  a  nennv 
for  itself.  Everything  that  it  does  is  to  serve  the 
grower.  Every  director  has  to  be  a  grower ;  then  all 
the  interests  are  a  community  of  interests — the  grow¬ 
ers’  stuff  and  the  directors’  stuff  all  in  the  same  pool. 
Then  you  grade  it,  put  it  in  separate  pools  and  sell  it. 
The  expenses  are  paid  and  the  balance  goes  back  to 
the  grower. 

The  next  California  principle  is,  don’t  work  through 
amateurs ;  don’t  have  anybody  but  experts.  You 
won’t  have  to  have  amateurs.  There  are  already  some 
j  men  who  have  been  angling  to  find  out  how  the 
;  biggest  jobs  in  this  organization  can  be  secured. 

Armour  Company  has  hired  good  men  all  over  the 
world — able  men — and  their  one  purpose  is  to  see  if 
they  can  separate  the  farmers  of  the  country  from 
their  grain  at  the  lowest  price  to  the  farmer  and  the 
greatest  profit  to  Armour.  He  hires  experts.  We 
hire  experts,  too.  We  find  that  the  Armour  money  is 
not  any  better  than  the  farmer’s  money.  We  hire  the 
very  men  that  they  hired,  but  we  hire  them  to  serve 
the  farmer  instead  of  exploiting  the  farmer ;  and  they 
say  they  would  rather  work  for  the  farmer  for  half 
the  price  than  for  the  exploiter  for  double  the  price. 

And  what  do  these  experts  do?  They  do  not  have 
any  magic  wand.  Cooperation  is  not  a  patent  medi¬ 
cine.  It  is  simply  this :  these  experts  handle  our 
problems  from  a  merchandising  standpoint  instead  of  . 
from  a  dumping  standpoint ;  they  have  learned  how  . 
to  control  the  so-called  rules  of  supply  and  demand ; 
they  help  create  demand — we  never  get  worried  about 


59 


demand.  We  need  our  experts  in  order  to  find  out 
liow  to  increase  demand. 

Tfien  we  start  out  and  we  borrow  the  money  on  it, 
and  I  want  you  to  know  that  our  bankers  at  home 
have  worked  out  several  different  systems  under 
which  we  get  money  on  our  crops  and  can  hold  our 
goods  over,  so  as  to  merchandise  and  not  dump  our 
crops.  I  want  to  tell  you  that  if  the  world  consumes 
one  hundred  and  fifty  million  pounds  of  prunes  a  year, 
and  we  have  a  crop  of  one  hundred  and  eighty  million 
pounds  a  year,  we  keep  thirty  million  pounds  of 
prunes  to  carry  over.  We  don't  let  one  man’s  prunes 
break  the  market  against  other  prunes.  We  have 
learned  how  to  do  something  with  supply.  We  never 
have  to  say  to  our  growers,  “reduce  your  acreage, 
because  they  all  pull  together.  We  give  them  the  full 
proceeds  of  what  is  sold ;  we  give  to  the  members  the 
loan  value  of  what  is  carried  over.  Every  grower 
feels  the  same  penalty  for  overproduction.  Automati¬ 
cally  they  reduce  their  crops  because  they  know  if 
they  produce  more  they  will  get  loan  value  instead  of 
sales  value. 

We  have  learned  all  that.  We  have  threshed  out 
all  these  problems  of  financing  and  warehousing.  You 
know  as  well  as  I  know  that  we  could  not  run  our 
business  for  twenty-five  years,  as  we  have  in  Cali¬ 
fornia,  without  meeting  all  the  problems  that  you  men 
have  to  meet  on  tobacco.  There  is  a  precedent  for 
anything  you  want  in  California,  and  this  contract  is 
simply  the  embodiment  of  all  these  principles  I  have 
been  telling  you  about,  and  all  the  experience  of  Cali¬ 
fornians  in  the  handling  and  marketing  of  farm 
products.  We  have  adapted  it  to  tobacco.;  we  adapted 
it  to  tobacco  with  our  eyes  open. 


60 


We  fiist  looked  up  all  about  tobacco — don’t  listen 
to  those  fellows  who  come  to  you  and  tell  you  that  I 
am  full  of  prunes  and  raisins,  and  that  I  don’t  know 
anything  about  tobacco  grading,  and  that  therefore 
(his  contract  might  be  good  for  prunes  and  raisins 
and  not  good  for  tobacco.  The  fellow  who  tells  you 
that  is  full  of  tobacco  all  right,  and  he  has  got  a  profit 
in  keeping  you  in  your  present  system. 

Best  Bankers  and  Merchants  Friendly 

I  am  going  to  summarize  by  saying  I  told  you  the 
raisin  story — I  did  not  tell  you  because  it  was  inter¬ 
esting  ;  I  told  you  the  raisin  story  as  the  nearest  thing 
1  know  to  the  tobacco  situation.  In  fact,  you  can  do 
more  for*  tobacco  than  you  can  for  raisins,  because 
tobacco  is  less  perishable  than  raisins.  I  then  told 
you  the  principles  that  are  exemplified  in  successful 
California  Cooperative  Marketing  Associations.  I  ran 
!  through  your  contract.  I  told  you  that  you  form  that 
association  when  you  have  50  per  cent  of  the  tobacco 
in  Virginia  and  the  two  Carolinas  signed  up.  You 
then  go  in  and  deliver  your  tobacco,  grade  it  into  pools 
and  merchandise  those  pools.  You  will  take  care  of 
iyour  warehouses  under  the  Coykendall  plan  of  finance 
set  out  in  full  in  your  contract.  You  will  take  care 
of  your  advance  payments  and  crop  mortgages  on  a 
standard  banking  basis ;  you  will  ask  the  banks  to 
appoint  a  committee  to  work  that  out  with  you.  You 
will  find  that  the  best  banks  are  for  you.  Some  of 
the  banks  and  some  of  the  merchants  are  against  you 

I  because,  perhaps,  they  have  an  interest  the  other  way ; 
but  don’t  get  worried  about  that.  The  best  of  the 
banks,  wTio  are  doing  business  in  terms  of  the  com¬ 
munity,  will  be  with  you.  So  will  your  merchants ;  so 


will  everybody  who  thinks  for  community  prosperity 
instead  of  some  one  little  individual,  or  some  one 
particular  year’s  prosperity. 

Now  I  want  to  say  this  as  a  last  thing :  Don’t 
think  that  cooperative  marketing  only  makes  money. 
It  does  more — money  is  the  least  thing  that  it  makes. 
When  we  started  cooperative  marketing  in  California 
we  had  to  pool  with  industries  just  like  yours ;  and 
we  had  to  pool  them  in  districts  just  like  yours ;  we 
had  to  pool  in  districts  in  which  the  standard  of  living 
is  just  what  it  is  in  the  tobacco  district  of  Virginia. 
I  have  told  you  that  there  is  no  difference  now  in  the 
way  our  farmers  live  and  the  way  our  city  people  live. 
We  have  farmers  who  have  $25,000  invested  in  a  farm 
who  live  on  the  same  plan  as  men  who  have -the  same 
amount  invested  living  in  the  city.  School  systems 
were  poor  and  everything  else  in  the  country  was 
poor.  We  have  changed  all  that ;  we  have  done  it 
only  through  one  thing — outsiders  did  not  do  it. 
Community  effort  did  it.  The  growers,  the  bankers, 
the  merchants,  the  editors,  the  lawyers,  the  doctors, 
the  teachers  in  the  community  got  together,  and  they 
substituted  COOPERATIVE  MARKETING  instead  of 
BLIND  MARKETING.  Our  farmers  and  their  fami¬ 
lies  have  a  real  standard  of  living  today.  Our  farm¬ 
ers  never  worry  about  marketing.  They  worry  about 
production  only.  They  produce  the  things  and  they 
leave  it  to  experts  to  market. 

You  are  going  to  produce  tobacco ;  you  are  going  to 
organize  and  then  leave  it  to  experts  to  market  your 
tobacco ;  and  I  stake  my  whole  standing  as  an  expert 
in  this  line  that  within  three  years,  or  five  years  at 
the  most,  you  are  going  to  have  a  new  rural  civiliza¬ 
tion  in  Virginia  on  this  account. 


Money  is  being  made  out  of  tobacco.  You  are  not 
making  it ;  you  are  not  making  your  share.  If  you 
have  cooperative  marketing  introduced  you  are  going 
to  close  up  that  gap  between  the  city  man  and  the 
country  man ;  you  will  not  have  your  boys  and  girls 
working  in  the  fields ;  you  won't  have  women  working 
in  the  fields.  You  won’t  have  your  country  women 
sand  girls  dressing  differently  from  the  city  women  and 
jgirls.  You  will  have  your  country  children  getting 
the  same  education  as  the  city  children  get.  Your 
growers  will  have  deposits  of  money ;  they  will  be 
carrying  life  insurance  to  provide  for  their  future  and 
the  future  of  their  families. 

Now  don’t  think  that  I  am  talking  dream  stuff,  or 
that  I  am  treating  you  to  a  lot  of  visions.  I  want  to 

Isay  I  have  not  said  a  word  to  you  that  I  have  not 
seen  worked  out  in  California ;  they  have  not  seen  it ; 
I  have  seen  it ;  I  have  not  dreamed  anything.  I  have 
seen  this  thing  done,  and  I  have  seen  it  done  with 
fourteen  different  commodities  in  my  own  state.  I 
lave  seen  those  growers  flat  and  despairing  just  like 
rou ;  I  have  seen  those  bankers  and  merchants  sud- 
lenly  jump  to  the  lead  and  lead  the  growers  to 
j  cooperation ;  and  I  have  seen  that  cooperation  change 
lie  rural  civilization  of  California  until  now  we  boast 
n  that  state  that  we  have  the  most  enlightened  rural 
'arm  group  of  any  state  in  the  land.  Four-fifths  of 
>ur  farmers  are  called  “Cooperatives” ;  90  per  cent  of 
;  hem  today  are  making  real  money  from  their  prod- 
icts,  whereas  in  almost  every  other  state  in  the  Union 
he  farmer  is  flat  broke.  The  result  has  been  that  the 
S  tandard  of  rural  living  in  California  is  on  a  plane  that 
Jlvould  amaze  you.  Our  growers  are  not  worried  with 


the  fear  that  the  profit  they  make  one  year  might 
have  to  go  to  pay  the  loss  of  the  next  year: 

Who  did  it?  Not  the  speculator  or  the  gambler  in 
the  West.  It  was  done  by  the  growers,  with  the  co¬ 
operation  of  the  bankers  and  the  merchants  and  the 
editors  and  the  leaders  of  thought. 

Now  if  we  did  it  in  California  you  can  do  it  in 
Virginia.  It  is  up  to  you  to  see  that  you  will  do  it  in 
Virginia. 


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